1978 (9) TMI 59 - CGOVT - Central Excise

Summary

Issues:
Review of Order-in-Appeal No. 1929-CE/76 based on clearance of waste paper without following prescribed procedure under Chapter X of Central Excise Rules, 1944.

Analysis:
The judgment pertains to the review of Order-in-Appeal No. 1929-CE/76 concerning the clearance of 18,727 kg of waste paper without adhering to the prescribed procedure outlined in Chapter X of the Central Excise Rules, 1944. Initially, the Appellate Collector accepted the appellant's arguments, stating that the waste paper was duly received and accounted for by the consignee, M/s. Bharat Carbon and Ribbon Manufacturing Co. Ltd., Faridabad. The consignee provided an affidavit and maintained that the waste paper was used in a different factory, exempting it from duty under Notification 77/74. Consequently, the duty demand was set aside, and the personal penalty was reduced. However, the Government of India tentatively disagreed with this decision, citing discrepancies in the record-keeping and failure to follow the Chapter X procedure. The show cause notice highlighted that the waste paper was cleared without payment of duty and without adhering to the prescribed procedure, making the order-in-appeal questionable.

During the personal hearing, the party argued that their lack of experience in the Central Excise procedures led to non-compliance. They also mentioned delays in obtaining proforma credit under Rule 56A and selling the broke to an L-6 license holder. Despite admitting the failure to follow the proper Central Excise procedure, the party sought leniency. Upon reviewing the submissions, the Government of India concluded that since the correct procedure for availing duty exemption under Chapter X was not followed, the benefit of Notification 77/74 could not be granted. Consequently, the demand for duty on the waste paper was deemed valid, and the order-in-appeal was set aside in this regard. The judgment emphasizes the importance of strict adherence to prescribed procedures in excise matters to avail exemptions and avoid duty liabilities.