2012 (2) TMI 424 - AT - Central Excise

Denial of benefit of Notification No. 50/2003-C.E., dated 10-6-2003 - appellant has not filed the requisite declarations and has not exercised his option in writing before effecting the first clearance - Held that - admittedly a declaration in terms of Notification No. 49/2003-C.E., dated 10-6-2003 was filed by the appellant. The purpose of filing a declaration is to put the Revenue on notice, as regards the appellant s option to avail the benefit of the notification. Otherwise also, both the notifications, being area based notifications are available to the units located in that particular area. The only difference between the two notifications is that whereas Notification No. 49/2003-C.E. is available to the units located in the entire State but relates to the positive list of goods mentioned therein, Notification No. 50/2003-C.E. is available to units located in specified areas. The purpose of both the notifications is to develop the area by expanding the benefit of exemptions from payment of duty of excise. The requirement of filing a declaration is a procedural condition. The benefit of the notification is not based upon the said procedural requirement of filing a declaration. In any case, declaration stands filed by the appellant. The fact that Notification No. 49/2003-C.E. was mentioned instead of Notification No. 50/2003-C.E., cannot be considered to be a mistake fatal to the appellant s claim of benefit. It is well settled law that the substantive benefit if otherwise available should not be disallowed on the basis of minor procedural irregularities. In the present case, we find that even such irregularity of non-filing of declaration was not there - Decided in favour of assessee.

Summary

Issues:
1. Denial of benefit of Notification No. 50/2003-C.E., dated 10-6-2003, an area-based exemption notification.
2. Challenge of the impugned order before the Hon'ble High Court and subsequent initiation of proceedings for confirmation of demand of duty.
3. Dispute regarding the inadvertent mention of Notification No. 49/2003-C.E. instead of Notification No. 50/2003-C.E. in the declaration filed by the appellant.

Analysis:
1. The impugned order denied the benefit of Notification No. 50/2003-C.E., an area-based exemption notification, to the appellant located in Uttarakhand. The appellant inadvertently mentioned Notification No. 49/2003-C.E. instead of the correct Notification No. 50/2003-C.E. in their declaration. The Commissioner held that the appellant did not file the requisite declarations under Notification No. 50/2003-C.E., thereby denying the benefit. The Tribunal noted that the purpose of filing a declaration is to notify the Revenue of the appellant's option for exemption. Both notifications aim to develop the area by exempting duty payment. The appellant argued that the procedural mistake of mentioning the wrong notification number should not deprive them of the substantive benefit of the correct notification. The Tribunal agreed, emphasizing that minor procedural irregularities should not disallow substantive benefits. The impugned order denying the benefit of Notification No. 50/2003-C.E. was set aside, and the appeal was allowed.

2. The appellant challenged the impugned order before the Hon'ble High Court, which directed them to file an appeal before the Tribunal along with a stay petition. The High Court restrained the department from collecting excise duty until the stay application was decided. Subsequently, proceedings for confirmation of demand of duty were initiated against the appellant, leading to another order confirming the demand. The Tribunal found that the purpose of staying the operation of the impugned order was defeated as the demand had already been raised and confirmed. Therefore, the Tribunal found no justifiable reason to stay the operation of the impugned order.

3. The dispute revolved around the inadvertent mention of Notification No. 49/2003-C.E. instead of Notification No. 50/2003-C.E. in the appellant's declaration. The Commissioner denied the benefit of Notification No. 50/2003-C.E. based on the incorrect declaration. The appellant argued that the substantive benefit should not be denied due to a procedural mistake. The Tribunal agreed, stating that the requirement of filing a declaration is procedural, and the substantive benefit should not be disallowed based on minor irregularities. The Tribunal set aside the impugned order and allowed the appeal, disposing of the stay petition as well.