2014 (5) TMI 751 - AT - Customs

Exemption under Notification No. 17/2001-Cus. - delay in submission of certificate - Held that - Notification stipulates that the end-use certificate shall be furnished within a period of three months or such extended period as the said Deputy Commissioner/Assistant Commissioner may allow, produce the extract of the aforesaid account, duly certified by the Deputy Commissioner/Assistant Commissioner to extend the period of submission of certificate. In the present case, there is no dispute that the appellant had used the imported material for the intended purpose and they also obtained the certificate, though belatedly, from the jurisdictional excise authorities and the same has been submitted to the Customs authorities. Since the substantive condition of exemption has been complied with by the appellant, the benefit of exemption should not be denied as held by the Apex Court in the case of Formica India Division 1995 (3) TMI 98 - SUPREME COURT OF INDIA . In the present case, we find that the substantive condition of exemption has been satisfied. Therefore, we hold that the appellant was rightly entitled for the benefit of exemption - Decided in favour of assessee.

Summary

Issues:
- Delay in submission of end-use certificate for claiming exemption under Notification No. 17/2001-Cus.
- Denial of exemption and confirmation of duty demand by the Commissioner of Customs (Appeals).
- Appeal by M/s. BASF India Ltd. against the rejection of appeals by the lower appellate authority.
- Interpretation of the requirement of furnishing the end-use certificate within a specified period.
- Compliance with substantive conditions of exemption by the appellant.
- Application of the precedent set by the Apex Court in the case of Formica India Division [1995 (77) E.L.T. 511 (S.C.)].

Analysis:
The case involved six appeals arising from orders passed by the Commissioner of Customs (Appeals), Bangalore, related to the import of 1 Methoxy Propanol (Solvenon PM) by M/s. BASF India Ltd. during May to August 2001, where exemption under Notification No. 17/2001-Cus was claimed for use in leather industries. However, due to a delay in submitting the end-use certificate, the exemption was denied, and duty demand was confirmed against the appellant. The lower appellate authority rejected the appeals, leading to the appellant approaching the tribunal.

The appellant failed to appear, while the Deputy Commissioner (AR) for the Revenue argued that the end-use certificate should have been furnished within three months, which was not done in this case, justifying the denial of exemption. The tribunal carefully considered the submissions and noted that the notification allowed for an extended period for submitting the certificate, subject to approval by the Deputy Commissioner/Assistant Commissioner. Despite the delay, the appellant eventually obtained and submitted the certificate from the excise authorities, confirming the use of the imported material for the intended purpose.

Relying on the precedent set by the Apex Court in the Formica India Division case, the tribunal emphasized that as the substantive condition of exemption had been met by the appellant, the benefit of exemption should not be denied. Therefore, the tribunal held that the appellant was rightfully entitled to the exemption and overturned the impugned orders, allowing the appeals. The decision underscored the importance of compliance with substantive conditions and upheld the principle that if the essential requirements for exemption are fulfilled, the benefit should not be withheld.