2010 (4) TMI 464 - AT - Customs

Export under bond - The assessees raised invoices on M/s. Sivaparvathi Textiles and claimed the benefit of Notification No. 43/2001-C.E., dated. 26-6-2001. The benefit of the notification was sought to be denied on the ground that the goods were supplied to Sivaparvathi Textiles, while the requirement under the notification was that excisable goods can be procured without payment of duty and cleared for the purpose of use in the manufacture or processing of export goods and their exportation out of India to any country except Nepal and Bhutan. Held that - condition of notification that goods used for manufacture/processing of export goods satisfied. Job worker entitled to benefit of notification.

Summary

Issues:
Claim of benefit under Notification No. 43/2001-C.E. denied based on goods supplied to a specific party; Clearance of goods under ARE-3 to exporters disputed; Upholding of adjudication order by Commissioner (Appeals) challenged before the Tribunal.

Analysis:
The case involved assessees engaged in manufacturing cotton yarn on a job work basis for M/s. Sivaparvathi Textiles, Guntur, receiving conversion charges. The benefit under Notification No. 43/2001-C.E. was denied due to goods supplied to Sivaparvathi Textiles, not meeting the notification's requirement of procuring excisable goods without duty payment for use in manufacturing or processing export goods. The contention that goods were cleared under ARE-3 to exporters was rejected, leading to an appeal before the Tribunal.

During the hearing, it was established that the disputed invoices were sent under ARE-3 to exporters like Raja Surgicals, Rayappa Textiles, and A.S. Marimuthu, who had filed Annexure-I applications with the Central Excise officer. The invoices raised on Sivaparvathi Textiles were solely for job charges realization, as confirmed by the documents on record. The JCDR supported the assessees' position regarding the manufactured goods sent under ARE-3 to exporters, refuting any procedural lapses and affirming compliance with Notification No. 43/2001 conditions.

Ultimately, the Tribunal held that the assessees had fulfilled the stipulated conditions of the notification, making them eligible for the benefit claimed. Consequently, the impugned order confirming duty and penalty imposition was set aside, and the appeal was allowed. The judgment was dictated and pronounced in open court, providing a favorable outcome for the assessees based on the presented evidence and legal arguments.