2004 (10) TMI 456 - AT - Central Excise

Summary

Issues Involved:
1. Whether the refund of Central Excise duty is payable by M/s. Saboo Cylinders (P) Ltd. under Notification No. 9/2002-C.E.

Detailed Analysis:
1. The issue in this Appeal is whether M/s. Saboo Cylinders (P) Ltd. is entitled to a refund of Central Excise duty under Notification No. 9/2002-C.E. The Assistant Commissioner denied the refund on the grounds that the company did not exercise the option in writing for availing the benefit of the notification. However, the Commissioner (Appeals) allowed the refund claim, citing that substantial benefit cannot be disallowed for non-filing of the option. The Senior Departmental Representative argued that as per the notification, the exemption applies only if the manufacturer exercises the option in writing before the first clearance, a condition not met by the company. The Tribunal referred to previous judgments emphasizing strict compliance with notification conditions for availing benefits.

2. The Advocate for the respondent contended that the company was eligible for the concessional rate of duty under the notification based on the value of clearance, and the non-filing of the option should not prevent them from availing the benefit. The Tribunal examined Notification No. 9/2002-C.E., which specifies conditions for the concessional rate of duty. The notification mandates that the manufacturer must exercise the option in writing before the first clearance, which the company failed to do. The Tribunal noted that the company never exercised the option during the relevant period, thereby disqualifying them from the benefit of the notification.

3. The Tribunal referenced the Supreme Court's decisions in similar cases, including Cadila Laboratories Ltd. and Eagle Flask Industries Ltd., which upheld the requirement of strict compliance with procedural conditions specified in the notifications. The Supreme Court emphasized that even if the assessee has the right to exemption, adherence to the prescribed procedure is essential. Failure to follow the procedure, such as submitting declarations and undertakings as required, results in the denial of benefits under the notifications. The Tribunal concluded that the benefit of Notification No. 9/2002-C.E. was not available to the respondents due to non-compliance with the conditions, thereby allowing the Appeal filed by the Revenue and setting aside the impugned order.

In summary, the Tribunal ruled in favor of the Revenue, holding that M/s. Saboo Cylinders (P) Ltd. was not entitled to a refund of Central Excise duty under Notification No. 9/2002-C.E. due to their failure to comply with the conditions specified in the notification, as emphasized by previous judgments and the Supreme Court's stance on strict adherence to procedural requirements for availing benefits under such notifications.