1999 (10) TMI 254 - AT - Central Excise

Tribunal rules end-use certificate not mandatory for excise duty benefits /88

The Tribunal allowed the appeal in a case involving contravention of Central Excise Rules, classification of Sorbitol under Notification No. 31/88, and ... Sorbitol - Bulk drug - End-use certificate Issues:1. Contravention of Central Excise Rules - Duty evasion2. Classification of Sorbitol under Notification No. 31/883. Requirement of end-use certificate for availing benefits under Notification No. 31/88Analysis:1. Contravention of Central Excise Rules - Duty evasion:The Commissioner found the appellants liable for contravention of Rules 9(1) and 173F of Central Excise Rules, 1944, for facilitating duty evasion by incorrectly determining and discharging their duty liability on Sorbitol supplied to M/s. Sarabhai M. Chemicals. Consequently, a demand of duty amounting to Rs. 81,32,904/- was confirmed, and a penalty of Rs. 8 lakhs was imposed on the appellants.2. Classification of Sorbitol under Notification No. 31/88:The appellants manufactured Sorbitol and claimed a 5% ad valorem duty rate under Notification No. 31/88 for other bulk drugs. The dispute arose when the Supdt. of Central Excise directed the appellants to obtain a revised end-use certificate, leading to a show-cause notice questioning the benefit of the notification due to the vagueness of the end-use certificate issued by M/s. Sarabhai M. Chemicals. The Commissioner observed that the end-use certificate did not specify whether the Vitamin-C manufactured by M/s. Sarabhai M. Chemicals qualified as a bulk drug or formulation, which was crucial for availing the notification.3. Requirement of end-use certificate for availing benefits under Notification No. 31/88:The appellants argued that the production of an end-use certificate was not necessary, citing Tribunal decisions that supported this stance. They contended that Sorbitol, being a bulk drug used in the manufacture of Vitamin-C, another bulk drug cleared at 5% duty under Notification No. 31/88, did not require an end-use certificate. The Tribunal agreed with the appellants, emphasizing that the consistent Tribunal decisions had established that the end-use certificate was not a prerequisite for availing the benefits under Notification No. 31/88. Consequently, the appeal was allowed, granting the appellants relief in accordance with the law.In conclusion, the judgment addressed the issues of contravention of Central Excise Rules, the correct classification of Sorbitol under Notification No. 31/88, and the requirement of an end-use certificate for availing benefits under the notification. The Tribunal's decision to allow the appeal was based on the interpretation of relevant legal provisions and precedents, emphasizing the consistent stance that end-use certificates were not mandatory for claiming benefits under the notification.