2024 (10) TMI 1554 - AT - Customs

Denying exemption under Sr.No.108 (1) of Notification No.23/98-Cus. dated 02.06.1998 - non-submission of end use certificate and where there is no condition stipulated against Sr. No.108 (1) for production of end-use certificate unlike in Sr. No.108 (2) - HELD THAT - We find that the appellant have availed the exemption Notification No.23/98-Cus Dated 02.06.1998 under Sr. No.108 description Serial No.1. From the above exempted entry at description Sr. No.1 of entry Sr. No. 108, it is found to be unconditional. Accordingly, there is no need of any production of end use certificate. The department has relied upon CBIC s circular No.74/1998-Cus dated 06.10.1998. However, it is a settled law that any condition which is not prescribed in the Notification the same cannot be read in the application of the Notification by issuing a board circular. We are completely agreed with this preposition as notification is a statute enacted by the Parliament which cannot be flouted by mere issuing a circular. Therefore, the board circular No. 74/1998-Cus dated 06.10.1998 is ultra vires to the Notification 23/98-Cus. dated 02.06.1998 in Sr. No.108 which does not prescribes the condition of end use certificate. We are of the clear view that in absence of any condition of end use certificate in the Notification, the same cannot be imposed and for that reason exemption cannot be denied. We set aside the impugned order and allow the appeal.

Summary

Issues involved:
Whether the Commissioner (Appeals) was justified in denying exemption under Sr.No.108 (1) of Notification No.23/98-Cus. dated 02.06.1998 for non-submission of end use certificate where there is no condition stipulated against Sr. No.108 (1) for production of end-use certificate.

Analysis:
The appellant argued that any condition not prescribed in the Notification cannot be imposed by the department. They contended that the demand was confirmed based on the non-submission of an end-use certificate, which is not a requirement as per the Notification. The Tribunal referenced judgments such as Anil Exports V.CC, Kandal - 2010 (261) ELT 870, and Century Enka Ltd V. CCE, Pune - 2017 (358) ELT 1002 to support the appellant's argument.

The revenue, represented by the Deputy Commissioner, supported the findings of the impugned order, emphasizing the importance of the end-use certificate.

Upon examination, the Tribunal found that the exemption under Sr. No.108 description Serial No.1 of the Notification was unconditional, and no production of an end-use certificate was necessary. They highlighted that any condition not specified in the Notification cannot be imposed through circulars, citing CBIC circular No.74/1998-Cus dated 06.10.1998. The Tribunal referred to the case of Anil Exports to support their decision, emphasizing that the goods should be for use in the leather industry without the need for evidence of actual use by the buyer.

The Tribunal also noted that the Original Adjudicating Authority had examined the certificate issued by a Chartered Accountant and invoices indicating sale to the leather industry, which supported the appellant's case. They criticized the Commissioner (Appeals) for not accepting the certificate based on the lack of evidence of actual use by the buyer, stating that such a requirement would introduce a new condition not permitted by the Notification.

In conclusion, the Tribunal set aside the order of the Commissioner (Appeals) and restored the decision of the Original Adjudicating Authority, allowing the appeal. They emphasized that in the absence of a specific condition for an end-use certificate in the Notification, exemption cannot be denied based on such grounds.

This judgment clarifies the importance of adhering to the conditions explicitly stated in notifications and highlights that additional requirements cannot be imposed through circulars, emphasizing the need for strict interpretation of statutory provisions.