2005 (1) TMI 303 - AT - Central Excise

Summary

Issues: Denial of benefit of exemption under Notifications No. 5/98-C.E. and 5/99-C.E. due to late production of certificates and existence of societies.

Analysis:
1. The appeal was against the denial of exemption under Notifications No. 5/98-C.E. and 5/99-C.E. The appellants supplied cotton yarn to NHDC at a NIL rate of duty during the disputed period. The denial was based on the late production of certificates from NHDC and issues regarding the existence of societies.

2. The denial was primarily on two grounds: first, certificates were not produced at the time of clearance as required by the notifications, and second, doubts were raised about the existence of societies to whom the goods were supplied. The appellants argued that the late production of certificates should not be a reason for denial, citing legal precedents.

3. The Tribunal analyzed the situation and found that the late submission of certificates should not be a valid reason to deny the benefit of the notifications. Legal precedents supported this view, emphasizing the need for a tangible reason to deny the exemption.

4. Regarding the existence of societies, the Tribunal noted that orders for supply were placed by NHDC, not individual societies. The appellants dispatched goods to societies as directed by NHDC, and payment was made by NHDC, not the societies. The Tribunal highlighted that the adjudicating authority did not thoroughly examine the issue in line with the wording of the notifications.

5. The appellants presented additional evidence to prove the existence of the societies in question at the time of supply. The Tribunal emphasized the need for a detailed examination of these documents by the adjudicating authority to determine the factual accuracy.

6. The Tribunal concluded that the adjudicating authority did not provide sufficient reasons for disallowing the exemption for clearances to societies other than the six in dispute. The matter was remanded back to the adjudicating authority for a fresh decision considering the observations made in the judgment.