2016 (3) TMI 260 - AT - Central Excise

Clearance of goods without payment of duty on the strength of C.T. 2 certificate issued by the authorities in-charge of cold storage - remission of duty under Chapter X of Central Excise Rules - Held that - As it is not in dispute that the appellant had cleared the finished goods to various consumers without payment of duty on C.T.2 certificate produced by such consumers. On perusal of the said C.T. 2 certificate, annexed in the appeal memo, I find that the certificate has been issued to the appellant after considering the factual position. I find strong force in the contentions raised by the learned Counsel that the C.T. 2 certificate cannot be equated with the exemption is law settled by the Apex Court in the case of SRF Ltd. (supra). This Tribunal in the case of SRF Ltd. (2003 (11) TMI 5 - CESTAT NEW DELHI ) has held that the clearances made under Chapter X procedure or under bond is not same thing as clearances of goods wholly exempt or goods chargeable to nil rate of duty hence provisions of Rule 57C of Central Excise Rules, 1944 are not applicable holding such view, held in favour of the assessee that he need not to reverse 8% / 10% of the value of the goods cleared by them by following Ch. 10 procedure. - Decided in favour of assessee

Summary

Issues:
- Interpretation of exemption under Chapter X of Central Excise Rules
- Applicability of Rule 57C of Central Excise Rules, 1944
- Comparison of different judicial precedents on similar issues

Interpretation of Exemption under Chapter X of Central Excise Rules:
The case involved the appellant clearing finished goods to consumers without duty payment based on C.T. 2 certificates issued by the consumers. The Revenue argued that the goods were exempted and the appellant needed to reverse a percentage of the value. The appellant contended that the clearances were not exempted as per a Supreme Court judgment and a previous Tribunal decision. The Tribunal analyzed the C.T. 2 certificate and held that it did not equate to exemption, citing legal precedents. It referenced a case involving SRF Ltd. to support its decision that clearances under Chapter X procedure are not the same as wholly exempted goods. The Tribunal also referred to a case involving Dharamsi Morarji Chemical Co. Ltd. to strengthen its stance that Rule 6 provisions did not apply in this scenario.

Applicability of Rule 57C of Central Excise Rules, 1944:
The Tribunal examined the arguments presented by both sides regarding the applicability of Rule 57C. It highlighted the distinction between goods cleared under Chapter X procedure and those that are wholly exempt or chargeable to nil duty rate. By referencing legal judgments and the Apex Court's decision, the Tribunal concluded that Rule 57CC did not apply in this case as the goods in question were not exempted or chargeable to nil duty. It relied on various judicial precedents to support its decision and set aside the impugned orders.

Comparison of Different Judicial Precedents on Similar Issues:
The Tribunal compared and contrasted various judicial precedents cited by both parties to establish a clear understanding of the legal principles at play. It referenced cases such as Micro Melt Pvt. Ltd., Ballarpur Industries Ltd., and Aureola Chemicals Ltd. to support its interpretation of the law. By analyzing the facts and legal reasoning in these cases, the Tribunal justified its decision to set aside the impugned orders and allow the appeals. The Tribunal emphasized the importance of distinguishing between goods cleared under Chapter X procedure and those that are genuinely exempted from duty, reinforcing its stance on the specific issue at hand.