1997 (4) TMI 256 - AT - Central Excise

Summary

Issues:
Demand of central excise duty on non-specified motor vehicle parts cleared without payment under Exemption Notification. Applicability of Chapter X Procedure of Central Excise Rules. Interpretation of Rule 156B and Rule 173N. Liability for producing rewarehousing certificates. Validity of CT 2 Certificates. Proper accountability for goods supplied under Chapter X Procedure.

Analysis:
The judgment pertains to four appeals filed by M/s. Dhanda Engineers Pvt. Ltd. challenging the Order-in-Appeal passed by the Collector of Central Excise (Appeals), New Delhi. The issue revolves around the demand for central excise duty on non-specified motor vehicle parts cleared without payment under Exemption Notification No. 167/79-C.E. The adjudicating authority observed that M/s. Dhanda had not filed rewarehousing certificates for the cleared goods, leading to the demand for central excise duty. The Collector of Central Excise (Appeals) upheld the orders, prompting the appeals.

During the hearing, M/s. Dhanda argued that they had followed the Procedure under Chapter X of the Central Excise Rules and were not required to comply with Rules 156B and 173N. They cited a Tribunal decision to support their stance. The Revenue reiterated the arguments of the adjudicating authority and the Appellate Authority.

The Tribunal analyzed the matter, noting that the goods were exempted from excise duty under a specific Notification subject to compliance with Chapter X Procedure. M/s. Dhanda supplied motor vehicle parts to OE manufacturers with L6 licenses, removing goods based on CT 2 Certificates provided by the manufacturers. M/s. Dhanda contended that the accountability for the goods lay with the OE manufacturers under Rules 192 to 196 BB.

The Tribunal delved into the detailed procedure outlined in Chapter X of the Rules for obtaining remission of duty on excisable goods. It highlighted the requirements for obtaining L6 licenses, executing bonds, issuing CT 2 certificates, and proper handling, storage, and accounting of goods. Rule 196 stipulated that duty became payable if the goods were not accounted for as per the application.

The Collector of Central Excise (Appeals) had observed that Rule 156B applied to the goods covered under Chapter VIIA, making M/s. Dhanda liable for producing rewarehousing certificates. However, the Tribunal disagreed, stating that Chapter X goods were governed by a different self-removal procedure under Rule 173 P, not Rule 173N. The Tribunal found that M/s. Dhanda, having cleared goods with valid CT 2 certificates, could not be held liable for the duty demanded.

In conclusion, the Tribunal allowed all four appeals, ruling in favor of M/s. Dhanda. The judgment emphasized that warehousing provisions did not apply to exempted non-specified motor vehicle parts under Chapter X Procedure, and the demand for duty was unwarranted in this case.