2018 (6) TMI 773 - AT - Central Excise

Benefit of N/N. 43/2001-CE(NT) dated 26/06/2001 - whether the export of the goods made under the provisions of Rule and Notification is only a procedural mistake or it is the non-compliance of the conditions mentioned in the Notification which would deny them the benefit contained therein? - Held that - As the goods procured vide the annexure 45 have not been used for intended purpose there is violation of Rule 6 of (Removal of Goods at Concessional Rate of Duty) in the instant case - this is not the only technical infraction of the conditions of the Rule but it is non-compliance of the condition of the Rule 6 in totality - demand upheld - appeal dismissed - decided against appellant.

Summary

Issues:
1. Applicability of Central Excise Rules and Notifications for procurement of excisable goods without payment of duty.
2. Alleged contravention of provisions leading to denial of benefits.
3. Procedural deficiency vs. non-compliance of conditions under the Notification.
4. Interpretation of case laws supporting procedural mistakes in benefit denial.

Analysis:
1. The appellant, engaged in manufacturing excisable goods and availing area-based exemption, applied for procurement of excisable goods without duty payment for export under Central Excise Rules. Permissions were issued for procuring goods, but discrepancies arose regarding the timing of exports and permissions granted.

2. The Revenue issued a Show Cause Notice for contravention of rules and after adjudication, denied benefits and confirmed the demand. The appellant's appeal was dismissed, leading to the current appeal.

3. The appellant argued that procedural delays by Revenue forced them to export goods before obtaining required permissions, emphasizing that substantial benefits should not be denied due to procedural mistakes. The appellant cited case laws supporting the condonation of procedural deficiencies to claim benefits under the Notification.

4. The Revenue contended that the appellant failed to follow procedures as per rules and notifications, making them ineligible for benefits. The Tribunal deliberated on whether the export before obtaining permissions constituted a procedural mistake or non-compliance with Notification conditions, leading to benefit denial.

5. The Tribunal analyzed case laws cited by both sides and held that the export of goods before obtaining permissions and subsequent replenishment with other goods for export constituted a violation of Rule 6, not just a technical infraction. Therefore, the Tribunal upheld the impugned order, rejecting the appeal based on non-compliance with conditions rather than a mere procedural mistake.