TaxTMI 
TaxTMI 
2010 (12) TMI 715
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.... notifications. Their aggregate value of clearances for home consumption for each financial year remained below the limits prescribed under the relevant SSI notification. Hence no payment of duty on the goods cleared for home consumption. The department issued show-cause notices to the assessee alleging inter alia that the corrugated boxes cleared to merchant-exporters during the material period were also liable to be accounted as 'clearances for home consumption' and hence to be included in the aggregate value of clearances for home consumption in the context of determining whether the SSI benefit could be claimed for such period. The show-cause notices alleged that the assessee was not entitled to exclude the clearances of corrugated boxes to the merchant-exporters, from the aggregate value of clearances for home consumption for purposes of the SSI notifications inasmuch as the goods cleared to the merchant-exporters were not directly exported from the assessee's factory. The show-cause notices further alleged that no correlation had been established between the goods actually exported by the merchant-exporters and the corrugated boxes cleared from the assessee's factory. On this....
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....f aggregate value of clearances for purposes of SSI notification on the ground that such boxes were cleared for export were not directly exported from their factory. In this connection, the Jt. CDR has particularly referred to para 4.1.2 of Part III of Chapter 7 of "Central Excise Manual of Supplementary Instructions", wherein it was laid down that H-Forms or equivalent Sales Tax Forms could be used as proof of export by exempted units and it was further clarified thus : "It is clarified that this facility is available only in respect of the exempted units which undertake exports themselves or through merchant-exporters directly from the unit itself". The learned Jt. CDR has heavily relied on this clarification of the Board and has submitted that, since the packing materials which were excluded from computation of the aggregate value of clearances of specified excisable goods for home consumption were not directly exported from the assessee's factory, they were not entitled to use H-Forms or equivalent Sales Tax Forms as proof of export in the context of claiming exclusion of the above clearance from the computation of aggregate value of clearances of excisable goods for home consu....
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....Excise Manual of Supplementary Instructions" was also considered alongwith certain circulars of the CBEC and it was held that the assessee in that case was entitled to reckon clearances of the subject goods (packing materials) to merchant-exporters as clearances for export and hence to exclude the same from computation of aggregate value of clearances of specified goods for home consumption under the relevant SSI exemption notifications. The decision rendered in Vadapalani Press's case was not challenged by the department. On the other hand, it was consistently followed by this Tribunal in similar cases such as Amar Packaging (supra) and Universal Packaging (supra). Nobody has claimed that any of the decisions was reversed by the competent appellate court. This very Bench followed the ratio of Vadapalani Press's case in Final Order No. A-336-337/2010 dated 9-9-2010 in the case of Universal Packaging (supra) and the said final order also appears to have been accepted by the Revenue. The department has no case that the facts of the present case are materially different from those of Amar Packaging (supra) or Universal Packaging (supra). In this scenario, is our considered view that t....
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.... of Supplementary Instructions 2003-04. Para 4.1.2 ibid reads as under :- "In the case of export through merchant-exporter the document prescribed by Sales Tax Department will be accepted as the proof of export. Sales made by manufacturer of the goods to the merchant-exporter which ultimately are exported are exempt from Central Sales Tax. The Sales Tax Department issues booklet to the merchant-exporters containing serially numbered H-Forms/ST-XXII form or equivalent Sales Tax form. After the goods have been exported by the merchant-exporters, the latter issues these forms to the manufacturers of the goods. The merchant-exporters in turn have to account all these serially numbered forms to the Sales Tax Department by furnishing a proof that the goods have been exported out. These proofs are in the form of presentation of the Shipping Bill duly completed by the customs, bill of landing, foreign exchange remittance certificates etc. The liability of the manufacturers to the Central Sales Tax gets discharged only when they submit these forms to the Sales Tax Department. It is, therefore, seen that indirectly exports get accounted for through the issue of H-form or ST-XXII Form. Thu....
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.... above rule contemplated export of the goods by the purchaser. By no stretch of imagination can it be said that the above rule contemplated retention of possession of the goods by the dealer (appellants in the present case) for its direct exportation from their own premises by the buyer (M/s. A.V. Thomas Co. or other similar customer in this ease). If the very physical export of the goods sold by the appellants to their customers is required to be made from the appellants' premises, why should the appellants be required to gather proof of export (in the form of Form-H certificate) from their customer? We have perused a specimen "Form-H" certificate issued by M/s. A.V. Thomas Co. to the appellants. This document (No. 107 dated 3-1-2005) cerfified as under :- "Certified that the goods the Particulars whereof have been specified in items (1) and (2) of the Schedule below supplied in pursuance of my/our Purchase Order No. (ANNEXURE ENCLOSED) Purchased from you as per bill/cash memo/Challan No. (ANNEXURE ENCLOSED) dated (ANNEXURE ENCLOSED) for Rs. 88,64,004.15 have been utilized by me/us in the packing of the goods exported by me/us outside the territory of India, as per the details ....
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.... the certificate in "Form-H" issued by the latter was accepted as proof of export and it was provided that, in case clearances from SSI unit for home consumption plus clearance for export, where proof of export was not furnished within 6 months, exceeded exemption limit, they should take Central Excise registration and follow the regular A.R. 4/A.R. 5 procedure. Where proof of export was furnished within 6 months, the clearances made for export were not to be added to clearances for home consumption. Circular No. 648/39/2002-CX. affirmed the position and further clarified that the above facility was available only in respect of exempted units which undertook exports themselves or through merchant-exporters. Ld. SDR argued that, for the above benefit, the SSI unit must be an "exempted unit", i.e. unregistered unit, and the export must be made either directly or through merchant-exporter. Neither of the Notifications speaks of registration of SSI unit. In the SSI scheme, a manufacturing unit is said to be "exempted unit" for a given financial year if it has enjoyed SSI exemption in the previous year. If, by excluding the clearances made by such a unit for export from the computation ....
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.... The department alleged that the benefit would not be available to the party inasmuch as they had not followed Chapter X procedure as required under the above notification. Before the Apex Court, the party pleaded substantial compliance. This plea was rejected. In para 34 of the judgment relied on by the Jt. CDR, their Lordships observed to the effect that the object and purpose of the procedure laid down in Chapter X procedure and the Central Excise Rules, 1944 were not to be overlooked. In another part of its order, the Apex Court noted that the case on hand was distinguishable from that of Thermax Pvt. Ltd. v. Collector, 1992 (61) E.L.T. 352 (S.C.). The learned Jt. CDR has today submitted that the Tribunal's decision in the case of Vadapalani Press and other similar cases does not reflect the correct law as it was based on the Apex Court's decision in the case of Thermax Pvt. Ltd. (supra), which has been held to be inapplicable in the case of Hari Chand Shri Gopal. In the case of Hari Chand Shri Gopal, the Apex Court noted the facts of Thermax Pvt. Ltd. and found the same to be distinguishable. Their Lordships were considering the question whether the goods cleared by the assess....