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2023 (9) TMI 917 - AT - Central ExciseAvailability of benefit of exemption subject to conditions - Notification No. 06/2006 dated 01.03.2006 - procedure laid down under Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 followed - Clearance of goods on the basis of a Certificate given by the Deputy Commissioner of Central Excise having jurisdiction over the customer M/s Natura Green Foods Products Private Limited - HELD THAT - This Bench in the case of M/S. HERO ELECTRIC VEHICLES PVT. LIMITED VERSUS COMMISSIONER OF CUSTOMS, LUDHIANA 2018 (6) TMI 141 - CESTAT CHANDIGARH held that goods having essential character of the items listed under Notification No.06/2006 dated 01.03.2006 are eligible for exemption. Hon ble Apex Court has upheld this decision. Moreover, Tribunal in the case of M/S. RAVIN CABLES LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III 2017 (2) TMI 375 - CESTAT MUMBAI held that the liability to discharge duty is on the end-user of goods. Thus, it is evident that the appellants have availed the exemption contained in Notification No.06/2006 dated 01.03.2006 only after the receipt of a Certificate issued by the jurisdictional Deputy Commissioner, in charge of their customer. The Department has not got the Certificate nullified/ modified/ withdrawn. Therefore, in view of the settled legal position, the Department has not made out any case for recovery of duty from the appellant - even if it is held that the appellant is not eligible to avail the exemption, their customer is liable to pay duty in terms of the bond. On this count also, duty cannot be confirmed on the appellants. The impugned order is not sustainable and the same is set aside - Appeal allowed.
Issues Involved:
1. Whether the appellants are liable to pay duty on goods cleared claiming exemption under Notification No.06/2006 dated 01.03.2006. 2. Whether the goods fall under List 4 of the Notification and thus eligible for exemption. 3. Whether the responsibility of verifying the descriptions of goods for exemption lies with the appellant or the departmental authorities. 4. Whether the duty liability, if any, lies on the appellant or their customer. Summary: Issue 1: Liability to Pay Duty on Goods Cleared under Exemption Notification The appellants cleared goods claiming exemption under Notification No.06/2006 dated 01.03.2006, following the procedure under Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001. The Department contended that the goods did not fall under List 4 of the Notification and hence, the exemption was not available. The appellants argued that they cleared the goods based on a Certificate issued by the Deputy Commissioner of Central Excise, which was not challenged or cancelled by the Department. The Tribunal held that without cancelling the Certificate, the Department cannot recover duty from the appellants. Issue 2: Classification of Goods under List 4 of the Notification The appellants contended that their goods, constituting 60-70% of the finished goods, fall under List 4 of the Notification as they give essential properties and characteristics to the finished goods. The Tribunal referred to previous judgments, including Teknik Plant & Machinery Mfg. Co. P. Ltd., which held that goods with essential character of listed items are eligible for exemption. The Tribunal did not offer an opinion on the eligibility based on classification due to the resolution of the case on other grounds. Issue 3: Responsibility of Verifying Descriptions of Goods The learned Counsel for the appellants argued that the responsibility of verifying the descriptions of goods for exemption cannot be shifted to the assessee, citing case laws such as Birla VXL Ltd. The Tribunal found merit in this argument, emphasizing that the responsibility lies with the departmental authorities. Issue 4: Duty Liability on Appellant or Customer The appellants argued that the duty liability, if any, should lie on their customer, who furnished a bond undertaking to pay the duty. The Tribunal referred to the case of Ravin Cables Ltd., which held that the liability to discharge duty is on the end-user of goods. The Tribunal concluded that even if the exemption was not available, the duty should be recovered from the customer, not the appellants. Conclusion: The Tribunal set aside the impugned order, holding that the Department had not made a case for recovery of duty from the appellants. The appeal was allowed, and the Tribunal did not offer an opinion on the eligibility based on the classification of the impugned goods.
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