2004 (8) TMI 533 - AT - Central Excise

Summary

Issues:
1. Denial of benefit under Notification No. 43/2001-CE
2. Interpretation of Rule 19 of the Central Excise Rules, 2001
3. Eligibility for benefit under Notification No. 214/86-C.E.

Analysis:

1. Denial of benefit under Notification No. 43/2001-CE:
The appellants sought waiver of pre-deposit of duty amounting to Rs. 5,87,94,338 demanded in the impugned order. The issue revolved around the denial of the benefit of Notification No. 43/2001-CE, dated 26-6-2001, which allows the procurement of excisable goods without payment of duty for processing and return without duty payment. The contention was that since the goods were manufactured by the principal manufacturer and not procured, the benefit was denied. However, the Tribunal noted that the notification does not mandate procurement for further processing for export under Rule 19 of the Central Excise Rules, 2001. The goods were removed with permission for processing and return without duty, indicating prima facie eligibility for the benefit.

2. Interpretation of Rule 19 of the Central Excise Rules, 2001:
The Tribunal analyzed Rule 19, emphasizing that it allows the removal of material without duty payment for use in manufacturing or processing goods for export. The rule does not specify that the material must be procured for further processing. Additionally, the Central Board of Excise and Customs can notify conditions for removal without using the term "procurement." The Tribunal highlighted that the goods in question were removed for processing and return with proper permission, indicating compliance with Rule 19 and eligibility for the benefit of Notification No. 43/2001.

3. Eligibility for benefit under Notification No. 214/86-C.E.:
Regarding the appellants' claim for the benefit under Notification No. 214/86-C.E., the Tribunal found that the exemption did not cover the goods involved in the case. Consequently, the claim for entitlement to this notification's benefit was deemed incorrect. Therefore, the Tribunal upheld the denial of benefit under Notification No. 214/86-C.E. due to the goods not falling within the exemption coverage.

In conclusion, the Tribunal granted waiver of pre-deposit of the duty amount pending appeal disposal based on the prima facie case made by the appellants for eligibility of the benefit under Notification No. 43/2001-CE. The detailed analysis of Rule 19 and the specific notifications clarified the eligibility criteria and justified the waiver decision.