2008 (7) TMI 755 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 1/95-CE, dated 4-1-95 regarding duty exemption for goods used in production for export.
2. Validity of using polythene pouches for packing fresh mushroom cleared to the DTA by a 100% EOU.
3. Permission granted by the Development Commissioner for clearance of goods to DTA.

Analysis:

1. The appeal was filed against an order demanding duty under Rule 9(2) of Central Excise Rules, 1944 read with Section 11A of the Central Excise Act, 1944. The issue revolved around whether the duty exemption under Notification No. 1/95-CE applied to goods used for production, even if not exported. The Commissioner found that the exemption covered goods used for production, processing, or packaging in the user industry, subject to certain conditions. The industrial license of the EOU indicated permission for manufacturing mushroom products for export and DTA sale, in compliance with the Exim Policy. The Commissioner concluded that the polythene pouches used for packing fresh mushrooms cleared to the DTA were covered by the permission granted by the Development Commissioner.

2. The main contention in the appeal was that the Development Commissioner had not granted permission specifically for the clearance of fresh mushrooms, challenging the use of polythene pouches under Notification No. 1/95-CE. However, the Revenue failed to substantiate this claim with documentary evidence. The absence of representation from the respondents further complicated the matter. The Tribunal noted the factual discrepancy between the Revenue's argument and the findings of the Commissioner, emphasizing the lack of evidence supporting the Revenue's position. Consequently, the Tribunal upheld the Commissioner's decision, ruling in favor of the respondent.

3. The crux of the issue lay in the interpretation of the permission granted by the Development Commissioner for the clearance of goods to the DTA. While the Revenue contended that the permission did not cover the clearance of fresh mushrooms, the Commissioner's order indicated otherwise. The Tribunal observed that the Revenue's failure to provide substantial evidence to support their argument weakened their case. Ultimately, the Tribunal upheld the Commissioner's decision, highlighting the factual nature of the dispute and the lack of evidence supporting the Revenue's position. As a result, the appeal filed by the Revenue was dismissed, affirming the impugned order in favor of the respondent.

In conclusion, the Tribunal's decision hinged on the proper interpretation of the duty exemption notification, the permission granted by the Development Commissioner, and the lack of concrete evidence presented by the Revenue to challenge the Commissioner's findings. The judgment underscored the importance of substantiating claims with documentary evidence in legal disputes to support the arguments effectively.