2003 (12) TMI 224 - AT - Central Excise

Summary

Issues:
1. Appeal against order-in-appeal setting aside order-in-original.
2. Eligibility for exemption under Notification No. 1/95-CE.
3. Obligation of manufacturer to pay duty on goods not eligible for exemption.
4. Verification of duty payment by recipients under bond.

Analysis:
1. The appeal was filed by the Revenue against the order-in-appeal setting aside the order-in-original. The grounds of appeal included the contention that the goods mentioned in the CT-3 certificates were not covered under the annexure to the exemption notification No. 1/95-CE. The Assistant Commissioner held that the exemption was available only for goods covered in the notification and not for goods like locks, steel furniture, and parts thereof. The appellate authority allowed the benefit of exemption based on the CT-3 certificate, which was deemed erroneous by the Revenue. The purpose of the procedure was emphasized to ensure exempted goods are used as stipulated.

2. The learned J.D.R. reiterated the grounds of appeal, while the respondents defended the impugned order citing relevant decisions. After hearing both sides and reviewing the case records, the Member found substance in the Commissioner's submissions. It was highlighted that even if goods were removed based on a CT-3 certificate, if they were not eligible for exemption under Notification No. 1/95, the manufacturer had an obligation to pay the duty. The obligation of the recipients under the bond did not extinguish the manufacturer's duty payment obligation when the notification was not applicable.

3. Regarding the duty liability, it was noted that if recipients had already paid the duty as per the bond requirements, there would be no basis to demand duty from the manufacturer again. However, in this case, there was no indication that the duty liability had been met by the recipients. Therefore, the impugned orders were set aside, and the matter was remanded to the original authority to verify if the duty amount had been paid by the recipients. If not, the original authority was directed to proceed against the respondents for recovery of the duty in accordance with legal provisions, allowing the appeal by way of remand.