2003 (9) TMI 489 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 43/2001-C.E. (N.T.) regarding duty free fabrics procurement for export through merchant-exporters.

Analysis:
The appellants manufactured textile articles using duty free fabrics for export through Merchant-Exporters. A clarification from the Ministry confirmed entitlement to duty free fabrics under Notification No. 43/2001-C.E. (N.T.) for direct exports through merchant-exporters. The Commissioner of Central Excise, Jaipur imposed a duty demand, penalty, and interest, disregarding the Ministry's clarification and misapplying the CBEC Manual of Supplementary Instruction, 2002, which lacked legal validity.

Analysis:
The Tribunal found no evidence of misuse of duty free fabrics or failure to export the manufactured products. The Ministry's clarification supported the appellants' position, emphasizing the duty demand was unjustified, conflicting with the government's pro-export policy. The Commissioner should have sought further clarification if in doubt instead of burdening genuine exporters with substantial financial penalties.

Analysis:
The Tribunal, based on the Ministry's clarification, overturned the Commissioner's order, emphasizing the appellants' right to duty free inputs for direct exports through merchant-exporters under Notification No. 43/2001. The decision highlighted the importance of adhering to government policies supporting exporters and cautioned against imposing heavy financial burdens without proper justification or clarification.