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2016 (7) TMI 1201 - AT - Central ExciseProcurement of inputs without payment of duty - export of exempted goods - Department took the view that Notifications No.24/2010-CE(NT) dated 26.05.2010 has amended Notification 42/2001-CE(NT) dated 26.06.2001 inserting a condition restricting the scope of earlier Notification and specifically excluding export of excisable goods which are chargeable to Nil rate of duty or wholly exempted from payment of duty under bond; that since frozen prawns/shrimps and other marine food are chargeable to Nil rate of duty, hence export of these goods are not done under bond; therefore procurement of packing material from the exporter without payment of duty vide Notification No.43/2001-CE (NT) dated 26.06.2001 is incorrect. Held that - when such Annexure 1 certificate continued to be live and are not cancelled or declared void by department after following due procedure. The clearances effected on the strength of such annexure by the appellant cannot be denied the benefit of exemption provided by notification 43/2001 CE (NT) dated 26.06.2001. Unless annexure 1 certificate is cancelled or rejected by competing authority by following procedure under Section 35 E department cannot invoke Section 11A - impugned order is unsustainable and requires to be set aside, which we hereby do. - Decided in favor of assessee.
Issues:
- Interpretation of Notification No.43/2001-CE(NT) dated 26.06.2001 - Applicability of Central Excise (Removal of Goods at Concessional rate of Duty for manufacture of Excisable Goods) Rules 2001 - Liability of duty payment on exporter or appellant - Validity of Annexure 1 certificates - Jurisdictional authority to cancel Annexure 1 certificates Interpretation of Notification No.43/2001-CE(NT) dated 26.06.2001: The case involved the appellant clearing goods without duty payment under Notification No.43/2001-CE(NT) dated 26.06.2001 for sea food exporting units. The Department contended that amendments in Notifications No.24/2010-CE(NT) restricted the scope of earlier notifications, excluding goods chargeable to Nil duty. The appellant argued that as long as Annexure 1 was valid, the Department couldn't raise a demand, citing precedents. The Tribunal found that the appellant's clearances were based on valid Annexure 1 certificates, granting exemption under the notification, which hadn't been canceled by authorities, thus entitling the appellant to the exemption. Applicability of Central Excise (Removal of Goods at Concessional rate of Duty for manufacture of Excisable Goods) Rules 2001: The Tribunal noted that each Annexure 1 issued to the appellant certified the exemption under Notification No.43/2001-CE(NT) for specific goods used in manufacturing frozen shrimp/prawn for export, with necessary endorsements from the jurisdictional authority. The Tribunal emphasized that the appellant followed the rules by obtaining valid Annexure 1 certificates, which were not canceled, and thus the clearances made under these certificates were entitled to the exemption. Liability of duty payment on exporter or appellant: The appellant argued that the duty demand should be on the exporter, not them, as the exporter availed exemptions. The Tribunal found that as long as the Annexure 1 certificates were valid and not canceled, the appellant was entitled to the exemption and couldn't be held liable for duty payment, aligning with previous decisions emphasizing the importance of canceling Annexure 1 before demanding duty. Validity of Annexure 1 certificates: The Tribunal highlighted that the Annexure 1 certificates issued to the appellant were live and not canceled by the Central Excise authorities. Relying on precedents, the Tribunal concluded that without canceling these certificates, demanding duty from the appellant was not legally sustainable, as the certificates granted exemption from duty payment. Jurisdictional authority to cancel Annexure 1 certificates: The Tribunal reiterated the necessity for the competent authority to cancel Annexure 1 certificates following due procedure before demanding duty. Citing previous judgments, the Tribunal emphasized that without canceling these certificates, the demand for duty against the appellant was not legally valid. The Tribunal set aside the impugned order, allowing the appeal with consequential reliefs.
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