1996 (4) TMI 301 - AT - Central Excise

Summary

Issues:
1. Appeal against Order-in-Appeal regarding central excise duty demands exceeding exemption limits for Tariff Items 61 and 68.
2. Interpretation of benefit under notifications for export clearance.
3. Determination of liability for duty payment based on clearance for home consumption and subsequent export by third parties.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Mumbai-I concerned a central excise duty demand against the respondents for exceeding exemption limits for items falling under Tariff Items 61 and 68. The demands were raised due to the respondents surpassing the exemption limits specified in relevant notifications by clearing goods for home consumption that were eventually exported by third parties. The respondents argued that the goods cleared for home consumption were later exported, keeping them within the exemption limit. However, it was found that the export was not directly by the respondents or on their behalf, leading to the confirmation of demands by the Collector (Appeals).

The Ld. SDR contended that the benefit of export clearance under the notification is only applicable when the manufacturer directly exports the goods. Referring to a Tribunal decision, it was argued that clearances for home consumption, followed by export by third parties, do not qualify for the exemption. On the other hand, the Ld. Advocate for the Respondents argued that once the fact of export is established, the benefit under the notification should not be denied, relying on a previous decision.

The Tribunal analyzed the submissions and found that the respondents had indeed exceeded the exemption limits, making them liable to pay duty unless the value of goods exported was excluded. Since the respondents were not the direct exporters and no evidence linked specific clearances to subsequent exports, the Tribunal concluded that the benefit of excluding export clearances for computing the exemption limit was not applicable. Consequently, the Tribunal set aside the Collector (Appeals) order and restored the Order-in-Original, holding the respondents liable to pay the duty.

In summary, the judgment clarified that to avail the benefit of exemption under the notification, clearances from the factory must be specifically for export, which was not the case here. The lack of evidence linking clearances for home consumption to subsequent exports by third parties led to the denial of the exemption benefit, making the respondents liable for duty payment.