2017 (5) TMI 809 - AT - Central Excise

Statement in the Form specified in Annexure 19 as prescribed in para 13.2 of Part II of Chapter 7 of CBEC Manual of Supplementary Instructions - the assessee s contention is that the statement is not substantive requirement under the N/N. 42/2001-CE (NT) - Held that - This matter is covered by the Tribunal s decision in appellant s own case 2015 (2) TMI 1093 - CESTAT NEW DELHI , where it was held thatthe appellant is not required to file details as per annexure 19 to special instruction and as such, the letter of undertaking cannot be declared invalid by the lower authorities - the appellant is not required to file details as per annexure 19 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against demand of Central Excise duty and penalties for non-submission of specified statement in Annexure 19 as prescribed in CBEC Manual of Supplementary Instructions.

Analysis:
The case involved M/s. Special Spring India Pvt. Ltd. and others appealing against the demand of Central Excise duty and penalties imposed for not submitting a statement in the specified form as required by the CBEC Manual of Supplementary Instructions. The appellant argued that the statement was not a substantive requirement under Notification No. 42/2001-CE (NT). The Tribunal had previously ruled in the appellant's favor in a similar case, emphasizing that a Circular cannot override a Notification issued by the CBEC. The appellant cited the Supreme Court's decision in Sandur Micro Circuits Ltd. vs. CCE, Belgaum to support their contention that exemption notifications cannot be restricted by supplementary instructions. Additionally, the Tribunal had previously dropped penalties for non-compliance with Annexure 19 requirements in another case.

The main issue before the Tribunal was whether instructions issued under Rule 31 would prevail over the notification issued by the CBEC. Citing the Supreme Court's stance that Circulars cannot diminish the effect of statutorily issued Notifications, the Tribunal ruled in favor of the appellant. The Tribunal found that the instructions requiring submission in Annexure 19 were not consistent with the Act and Rules, and thus the penalty imposed for non-compliance was not justified. The Tribunal also noted that the information required in Annexure 19 was available to the Revenue, making the breach a technical one without causing any revenue loss. Therefore, the penalty imposed was set aside, and the appeal was allowed.

In conclusion, the Tribunal set aside the impugned order, allowing all appeals with any consequential benefits. The ruling emphasized that instructions under Rule 31 cannot override notifications issued by the CBEC, and penalties for non-compliance must be justified based on consistency with the Act and Rules.