1987 (6) TMI 294 - AT - Central Excise

Summary

Issues:
- Appeal against order demanding repayment of duty set off availed by respondents.
- Procedural lapses cited by departmental authorities.
- Lower appellate authority setting aside Assistant Collector's order.
- Interpretation of Notification No. 178/77 and subsequent conditions.
- Validity of maintaining prescribed registers and following procedures.
- Applicability of exemption notifications despite procedural deviations.
- Legal precedent supporting substantive benefit over procedural lapses.

Analysis:
1. The appeal was filed by the Collector of Customs and Central Excise against an order demanding the repayment of duty set off availed by the respondents. The grounds for demanding back the set off included procedural lapses cited by the departmental authorities. These lapses included not maintaining prescribed registers, failing to send intimation about raw material inputs, and availing set off without receiving necessary duty payment documents.

2. The Assistant Collector confirmed the demand against the respondents, but the lower appellate authority set aside this order. The lower appellate authority observed that the department had not initially prescribed a specific method to follow before availing the benefits under Notification No. 178/77. The authority emphasized that a manufacturer's substantive right should not be affected by procedural or technical lapses if they can prove duty payment on inputs used in manufacturing finished goods.

3. The appellant-Collector reiterated the same grounds in the appeal memorandum, while the learned SDR for the Revenue supported the grounds of appeal set out by the appellant-Collector. On the other hand, the advocate for the respondents argued that the lower appellate authority's decision was correct in law. The advocate stressed that procedural deviations should not hinder the substantive benefit granted by exemption notifications.

4. The advocate for the respondents highlighted that maintaining prescribed registers as per a trade notice was not feasible due to industry-specific difficulties. The advocate argued that a substantive benefit should not be denied due to procedural deviations, citing legal precedents like the Chemiequip Ltd. case and Electronics Limited v. Union of India case. The advocate emphasized that procedural compliance should be seen as directory rather than mandatory.

5. The Tribunal, after considering arguments from both sides, upheld the lower appellate authority's decision. The Tribunal emphasized that procedural deviations should not obstruct the availing of substantive benefits under exemption notifications. Legal precedents, including judgments in cases like Indian Oil Corporation Limited v. Collector of Central Excise and Sunderam Fastners Ltd. v. Collector of Central Excise, supported this stance. The Tribunal dismissed the appeal, stating that the procedural deviations should not bar the respondents from availing the benefits of the notifications.

6. In conclusion, the Tribunal found no fault with the lower appellate authority's decision and dismissed the appeal. The judgment highlighted the importance of substantive benefit over procedural lapses when it comes to availing exemptions granted under notifications. The decision underscored that procedural compliance should be seen as a means to further justice rather than impede it.