2013 (7) TMI 467 - AT - Central Excise

Stay Application Export under bond - conditions and procedures - export of exempted / non excisable goods - Procedural requirement under Notification No. 42/2001-CE (NT) dated 26.06.2001 - Notification No. 42/2001 has two separate divisions (limbs) namely conditions and procedure - The Notification No. 24/2010-CE (NT) has amended the Condition No. 4 thereby disallowing the exporters of goods which are not liable to duty from exporting under bond - Amendment by Notification No. 24/2010-CE (NT) dated 26.05.2010 - Manufacturers who are exporting the exempted/non-excisable goods cannot export them under bond or LUT - Notification No. 43/2001 which was followed by the appellants only requires the procedure to be followed by the exporters prescribed under Notification No. 42/2001 Held that - Having regard to the fact that ultimately the goods removed without payment of duty used for export which is the objective of the scheme and there can be views on the issue as to whether conditions and procedure can be separated - Appellants have been able to make out a prima facie case in their favour for complete waiver Decided in favor of Assessee.

Summary

Issues:
Interpretation of Notification No. 43/2001-CE (NT) for duty payment exemption on exported goods.

Analysis:
The case involved the interpretation of Notification No. 43/2001-CE (NT) regarding duty payment exemption for goods exported under specified conditions. The appellants, manufacturers of carton boxes, availed CENVAT credit on inputs and paid duty on domestic clearances. However, they exported goods to seafood units without duty payment, relying on the notification. The department contended that the notification did not apply due to amendments restricting exemptions for goods chargeable to nil duty. This led to demand notices for duty, interest, and penalties.

The appellant argued that they followed the procedure under Notification No. 43/2001 and that the amendments to Notification No. 42/2001 did not affect their eligibility for benefits under Notification No. 43/2001. The department insisted that conditions and procedures under the notifications could not be separated, emphasizing non-compliance with specific requirements.

The Tribunal acknowledged that the goods were used for export purposes, indicating the scheme's objective fulfillment. While the exact export procedure compliance was unclear, the Tribunal noted the appellant's prima facie case for waiver due to the segregation of conditions and procedures under the notifications. The Tribunal highlighted the importance of examining whether fulfilling export procedures without meeting all conditions entitled the appellant to Notification No. 43/2001 benefits, citing the lack of judicial precedents on this issue.

Considering the goods' ultimate use for exports and the potential separation of conditions and procedures, the Tribunal granted a stay on recovery during the appeal's pendency, recognizing a prima facie case in favor of the appellants. The decision underscored the need for a detailed examination of the interplay between conditions and procedures under the notifications, urging a deeper analysis of statutory provisions and judicial precedents to clarify the issue.