2013 (7) TMI 467

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....s of corrugated carton boxes and duplex board cartons. They are availing CENVAT credit of duty paid on the inputs and in respect of their clearances in the domestic market are paying duty in respect of the final products. It was noticed on a scrutiny of verification of ER-1 that the appellant had cleared the products to various sea food exporting units without payment of duty by availing Notification No. 43/2001-CE (NT) dated 26.06.2001. The products were used as packing material by the sea food exporting units in the exported sea food products and other sea foods. A view was taken by the department that the notification is not applicable to the appellants on the basis of provisions of notification discussed as under:    i. ....

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....nated into the impugned orders confirming the demand for duty on the clearances made without payment of duty with interest and penalty also has been imposed under Rule 26 of Central Excise Rules 1944. 3. On behalf of the appellants it was submitted that the view taken by the department is totally wrong. What is required according to the provisions of Notification No. 43/2001 clause (vi) is that the goods have to be exported and procedure specified in Notification No. 43/2001-CE (NT) is followed. According to the appellant, Notification No. 42/2001 has two divisions. Under para 1 conditions have been specified and under para 2 procedure has been specified. The stand taken by the department is that Condition No. (iv) in Notification No. 42....

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....erefore the exporter or the manufacturer is not liable to pay duty or would be entitled to refund and therefore the issue in this case to be one of procedural requirements fulfillment only. It is not clear whether goods were exported by filing ARE-2 or not. However, prima facie, we find that the submission on behalf of the appellant that Notification No. 42/2001 has two separate divisions (limbs) namely conditions and procedure is correct. The segregation of conditions and procedure is significant. The Notification No. 24/2010-CE (NT) has amended the Condition No. 4 thereby disallowing the exporters of goods which are not liable to duty from exporting under bond. Because of this reason one of the conditions cannot be fulfilled. Whether cond....