2004 (2) TMI 535 - AT - Central Excise

Summary

Issues:
Availability of benefit under Notification No. 1/95-C.E., dated 4-1-1995, as amended, to a 100% EOU for procuring HSD/FO without obtaining approval of the Commissioner of Customs on the recommendation of the Development Commissioner.

Analysis:

Issue 1: Benefit of Notification No. 1/95-C.E. after amendment
The appeal concerned the availability of benefits under Notification No. 1/95-C.E., dated 4-1-1995, as amended by Notification No. 31/98-C.E., dated 15-9-1998, to the respondents who were a 100% EOU procuring HSD/FO. The Revenue contended that the respondents did not obtain the necessary approval of the Commissioner of Customs on the recommendation of the Development Commissioner, making them liable to pay central excise duty. The respondents argued that the CT-3 certificate they held remained valid even after the amendment, enabling them to procure duty-free HSD/FO without the additional approval. They also relied on a previous legal case to support their position.

Issue 2: Interpretation of amended Notification and legal obligations
The Tribunal analyzed the implications of the amendment to Notification No. 1/95-C.E. and the insertion of a new provision requiring approval for procuring fuel, lubricants, and consumables. It was established that post-amendment, the approval of the Commissioner of Customs on the recommendation of the Development Commissioner was a prerequisite for availing duty-free benefits on HSD/FO. The Tribunal rejected the argument that the earlier CT-3 certificate could still be used, emphasizing the necessity of complying with the amended provisions. The Tribunal differentiated the present case from a previous judgment, highlighting the specific requirements of the amended notification.

Issue 3: Compliance with legal procedures and principles
The Tribunal emphasized the importance of strict compliance with exemption notifications, citing a legal principle that benefits can only be availed if the prescribed procedures and conditions are followed. As the respondents failed to obtain the required approval after the amendment, they were deemed ineligible for the benefits under the amended Notification No. 1/95-C.E. The Tribunal overturned the impugned order that had granted the respondents the benefit, citing the need for adherence to legal principles and conditions set out in the notification.

Conclusion:
The Tribunal allowed the appeal of the Revenue, holding that the respondents were liable to pay duty on the HSD/FO procured during the specified period due to non-compliance with the amended notification requirements. The decision underscored the necessity of following legal procedures strictly and set aside the earlier order that had granted the benefit to the respondents.