2016 (12) TMI 210 - AT - Central Excise

Application of Notification No. 43/2001-CE dated 26.06.2001 - procurement of raw materials - Held that - When the scope of notification is read, it is the goods that is emanating from imported raw material intended to be exported. Who exports is immaterial. Therefore, the goods that was exported was the outcome of the imported input. Without any contrary finding by the authority below, benefit of the notification is undeniable. There appears no violation of condition of Notification No. 43/2001-CE dated 26.06.2001 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Application of Notification No. 43/2001-CE dated 26.06.2001 in the procurement of raw materials for export goods.

Analysis:
The dispute in this case revolves around the application of Notification No. 43/2001-CE dated 26.06.2001 concerning the duty-free procurement of raw materials for the purpose of manufacturing or processing export goods. The appellant in question procured cotton yarn duty-free under this notification and used it in the manufacture of cotton grey fabric, which was then cleared to a manufacturer who further processed the fabric for export. The crux of the issue lies in the clearance of intermediate goods by the appellant, which were not directly exported, leading to the Department's allegation of prejudice due to the duty forgone on the raw materials imported duty-free by the appellant.

Upon examining the scope of the notification, it becomes evident that the focus is on the goods resulting from imported raw materials intended for export, regardless of the entity performing the exportation. The key point is that the exported goods were the direct outcome of the imported input. As there were no contradictory findings by the lower authority, it is clear that the appellant is entitled to the benefit of the notification.

Considering the factual circumstances and the absence of any violation of the conditions stipulated in Notification No. 43/2001-CE dated 26.06.2001, the appeals are deemed to be allowed. The judgment emphasizes that the essence of the notification is the exported goods originating from the imported input, ensuring that the duty-free procurement of raw materials for export purposes is upheld.

This decision underscores the importance of adhering to the conditions set forth in notifications regarding duty-free procurement of raw materials for manufacturing or processing goods intended for export. It clarifies that the focus is on the final exported goods being a direct result of the imported inputs, thereby safeguarding the benefits granted under such notifications.