1980 (2) TMI 75 - CGOVT - Central Excise

Summary

Issues:
1. Interpretation of Exemption Notification No. 154/70 regarding supply of sesqui sodium silicate.
2. Compliance with Chapter 'X' procedure for availing benefits of the Exemption Notification.
3. Requirement of AR 3 forms for clearance of goods.
4. Allegations regarding classification list for clearance of goods.
5. Sampling procedures and evidence of product compliance.
6. Consideration of mala fides in the absence of evidence.
7. Liability of manufacturer vs. user in availing benefits of Notification No. 154/70.

Analysis:
1. The judgment revolves around the interpretation of Exemption Notification No. 154/70 concerning the supply of sesqui sodium silicate. The petitioner contended that they followed the Chapter 'X' procedure by supplying calcium silicate to the consignee, who held a valid license. The denial of benefits under the Exemption Notification was challenged based on the absence of AR 3 forms with gate passes.

2. The compliance with the Chapter 'X' procedure was a crucial aspect of the case. The petitioner argued that the issue of AR 3 forms was not essential for availing benefits under Chapter 'X' as they cleared the goods on duty payment, not under bond. It was highlighted that the consignee submitted returns as per Chapter 'X' requirements, and the delay in receiving the approved classification list did not invalidate their compliance.

3. The necessity of AR 3 forms for clearance of goods was debated. The petitioner emphasized that the classification list was dispatched, although the approved copy was not received before the supply. The absence of this issue in the show cause notice but mentioned in the Assistant Collector's order was raised, indicating procedural discrepancies.

4. The judgment addressed allegations related to the classification list for goods clearance. It was noted that the Asstt. Collector did not dispute the filing of the classification list by the petitioners. The government emphasized that as long as the Chapter 'X' procedure was substantially followed to the authorities' satisfaction, denial of benefits under Notification No. 154/70 was unwarranted.

5. Regarding sampling procedures and evidence of product compliance, the petitioner failed to provide concrete evidence of proving the product's compliance with sesqui sodium silicate specifications before dispatch. However, the petitioner argued that such formalities were not explicitly listed in Chapter 'X' and contended that prior notification of requirements would have ensured compliance.

6. The consideration of mala fides in the absence of evidence was raised, with the petitioner urging a realistic view be taken unless mala fides were proven. The lack of evidence regarding mala fides led to a plea for leniency in the judgment.

7. Lastly, the judgment clarified the liability of the manufacturer versus the user in availing benefits under Notification No. 154/70. It was emphasized that the manufacturer's liability should not be transferred to the user, and the benefits should be granted based on the manufacturer's compliance with relevant procedures.

In conclusion, the judgment set aside the order-in-appeal, allowing the revision application with consequential relief to the petitioners based on the detailed analysis of compliance with the Chapter 'X' procedure and the interpretation of Exemption Notification No. 154/70.