2017 (6) TMI 677 - AT - Central Excise

100% EOU - deemed export - Goods cleared without Form I - demand of differential duty alongwith interest and penalties - Held that - the said condition of Form I in clause 4 of the notification cannot then be considered as a substantive law especially when all other requirements and other conditionalities have been satisfied - reliance placed in the case of SAMBHAJI Versus GANGABAI 2008 (11) TMI 393 - SUPREME COURT OF INDIA where it was held that procedural law is not to be a tyrant but a servant not an obstruction but an aid of justice - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeals related to clearances of Nylon Multifilament Yarn to advance license holders/EOU without following Central Excise Rules.

Analysis:
The appeals involved clearances of Nylon Multifilament Yarn to advance license holders/EOU without availing CENVAT credit on inputs and without discharging duty on the ground of deemed export. The Department alleged non-compliance with Central Excise Rules, specifically regarding clearances after obtaining countersigned applications from advance license holders' Central Excise authorities. The original authority demanded differential duty, interest, and penalties, which were upheld by the lower appellate authority, leading to the appeals.

During the hearing, the appellant's advocate argued that the goods were received by the intended recipients, as confirmed by ARE3s endorsed by the jurisdictional Central Excise authorities at the consignee's end. It was highlighted that the requirement of clearing goods only after receiving Form I with endorsements was not a substantive requirement for claiming exemption. The advocate cited relevant case laws emphasizing procedural lapses not justifying denial of benefits.

On the contrary, the Department's representative supported the impugned order, emphasizing the importance of Form I as a procedural requirement for clearing goods to recipients without duty payment, stating it cannot be disregarded.

After hearing both sides and reviewing the facts, the Tribunal found that the goods reached the intended recipients and were used for the intended purposes. Despite the absence of Form I, the goods were cleared with ARE3s and endorsed receipts by Central Excise authorities. The Tribunal concluded that the requirement of Form I cannot be considered substantive, especially when all other conditions were met. Citing relevant case laws, the Tribunal ruled in favor of the appellant, setting aside the demands raised in the impugned orders.

Conclusively, all three appeals were allowed, providing consequential benefits as per the law, based on the Tribunal's findings that the demands against the appellant were not sustainable due to compliance with essential conditions and procedural considerations.