2024 (6) TMI 1104

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....eared that the exemption from duty would not be available for the clearances effected beyond the stipulated period. Therefore, a show cause notice dated 06.05.2013 was issued to the appellant for the period from April 2008 to February 2013 proposing to demand Central Excise Duty of Rs.20,82,825/- along with interest and for imposing penalties. After due process of law, the adjudicating authority confirmed the demand along with interest and imposed equal penalty under Section 11 AC of the Central Excise Act, 1944 as well as penalty under Rule 25 of the Central Excise Rules 2002. Against such order, the appellants approached the Commissioner (Appeals) who vide order impugned hearing upheld the order passed by the adjudicating authority. Hence, this appeal. 2. The Ld. Counsel Ms. Nimra Ali, appeared and argued for the appellant. 2.1. The Appellant had cleared paper boards to various buyers during the impugned Period by availing exemption under Notification 43/2001 -CE(NT) dated 26.06.2001. The said clearances were made against Annexure-I Certificates issued under the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 (&#....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... is well settled law that substantial benefit of notification cannot be denied for mere procedural lapses. Reliance in this regard is placed on the case of Mangalore Chemicals and Fertilizers Ltd. v. Deputy Commissioner, 1991 (8) TMI 83 - Supreme Court. Further reliance is placed on the following cases: • C.C.E & S.T. Rajkot v. Reliance Industries Limited, 2021 (12) TMI 848-CESTAT Ahmedabad. • M/S. S.L. polypack Private Limited v. Commissioner of CGST & CX Howrah Commissionerate, 2023 (1) TMI 931-CESTAT Kolkata  • Commissioner of Central Excise, Kolhapur v. Menon Exports, 2018 (4) TMI 666 CESTAT Mumbai. • M/S. Metalink v. Commissioner of' Customs, Kolkata, 2018 (6) TMI 1375-CESTAT Kolkata. A.6 On this ground itself, the Impugned Order merits to be set aside. B. Without prejudice, as per the Notification r/w Rule 3(4) and Rule 6 of the 2001 Rules, only the buyer is liable for any contravention of the conditions stipulated in the Notification. The security bond in this regard is also executed by the buyer. Thus, excise duty, if any, should be recovered only from the buyer. C. Extended period cannot be invoked ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d is placed on the following cases: • Union of India v. Rajasthan Spinning & Weaving Mills [2009 (238) E.L.T. 3 (S. C)]. • CCEv. Crocodile (India) Pvt. Ltd. [2013 (297) E.L.T. 363 (Mad.)] C.5 The Appellant further submits that the entire proceedings were initiated based on the statutory records maintained by the Appellant and therefore, extended period of limitation cannot be invoked. C.6 Consequently, the demand for the period from April 2008 to March 2012 to the extent of Rs. 20,25,387/- is time barred and liable to be set aside. D. Interest and Penalty under Section 11 AC cannot be imposed: D.1 It is submitted that since the entire demand is unsustainable, interest and penalty cannot be imposed. Furthermore, to invoke penalty u/s. I IAC of the Central Excise Act, 1944 r/w. Rule 25 of the Central Excise Rules, 2002, Mens rea is necessary and when no fraud/suppression/misstatement is alleged and proved, penalty cannot be imposed. Reliance in this regard is placed on the following cases: • Comm. Ofc. Ex., Chandigarh v. Pepsi Foods Ltd, 2010 (260) E.L.T. 481 (S.C.). • Hindustan Steel Ltd. vs. the State "Orissa 1978 (2) ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....re clearances made in violation of the provisions of Rule 4, 6 and Rule 8 of Central Excise Rules, 2002 and the duty confirmed in respect of such clearances is proper. The contention of the appellant that the duty has to be demanded from the buyer of the goods cannot be accepted. It is the appellant who has cleared the goods to the buyer which is not covered under Annexure-I certificate. Therefore, the duty liability falls upon the appellant. They have not produced the end-use certificate from the buyer of the goods to whom the goods were cleared which again would show that they did not follow the procedures prescribed under law. 4. The Ld. AR argued that Notification No.43/2001-CE (NT) dated 26.06.2001 prescribes safeguards and procedures for procurement of excisable goods without payment of duty. It also prescribes various conditions. As per the notification condition number (ii) specifically states that "provisions of the central excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules 2001 has to be followed. The appellants have not adhered to these rules. When a law describes a thing to be done in a particular manner, it has to be....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the Certificates. The notification or Rules does not put forward any condition to mention financial year. 8. For better appreciation, the relevant part of Notification No.43/2001-CE (NT) is reproduced as under:- 26th June, 2001 Notification No.43/2001-Central Excise (N.T.) Inputs for manufacturing/processing of export goods - Procurement without payment of duty - conditions, safeguards and procedures In exercise of the powers conferred by of sub-rule (3) read with sub-rule (2) of rule 19 of the Central Excise (No.2) Rules, 2001, the Central Board of Excise and Customs hereby notifies the conditions, safeguards and procedures for procurement of the excisable without payment of duty for the purpose of use in the manufacture or processing of export goods and their exportation out of India, to any country except Nepal and Bhutan, namely: - (i) the manufacturer or the processor intending to avail benefit of this notification shall register himself under rule 9 of the Central Excise No.2) Rules, 2001; (ii) provisions of the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....turer of Excise Goods) Rules 2001 as required by the above notification. The quantity and value of subject goods, we wish to obtain during the financial year ................. for the aforesaid specified purpose is ................. (specify quantity and value) and we intend to procure the subject goods for use in our premises at" 11. In Rule 3 & Rule 4 of Central Excise (Removal of Goods Concessional Rate of Duty for Manufacture of Excisable Goods) Rules 2001, there is no requirement to mention financial year in particular. In the application format of Annexure-I, the quantity and value of goods during the financial year is required to be mentioned. The allegation is that the appellants though mentioned the financial year as 2007-08 has cleared the goods for such Annexure-I certificates for invoices pertaining to subsequent financial years (2009-10) also. 12. The appellant has consistently submitted that the wrong financial year mentioned in the Annexure-I Form is only an error and that the goods cleared to the manufacturer buyer is correct. That as there is no allegation of excess clearances, the benefit of notification ought not to be denied for wrong mention of finan....