1999 (3) TMI 226 - AT - Central Excise

Summary

Issues: Export of goods to Nepal under Central Excise Rules and Notification No. 150/81. Demand of duty due to non-fulfillment of conditions.

Analysis:
1. Export Conditions and Non-fulfillment of Payment Requirement:
The case involved the export of goods to Nepal under Rule 13(2) of the Central Excise Rules along with Notification No. 150/81. The notification outlined specific conditions for such exports, including payment in freely convertible currency, opening of an irrevocable letter of credit by the importer, execution of a bond by the exporter, and submission of a certificate from the Reserve Bank of India or an authorized bank confirming payment in freely convertible currency. The appellants failed to provide proof of payment in freely convertible currency, leading to a demand of duty amounting to Rs. 1,55,300 under Rule 9(2) and Section 11A(1) of the Central Excise Act, 1944.

2. Appellant's Arguments and Department's Position:
The appellant contended that they were not informed of the requirement for payment in freely convertible currency at the time of clearance and that imposing this condition post-clearance was unjust. Additionally, they argued that since the goods were exported to Nepal, a foreign country, imposition of duty was legally unsound. On the other hand, the department argued that duty payment is mandatory for exports to Nepal under the Indo-Nepal Treaty, and non-receipt of freely convertible currency invalidated the export conditions specified in the notification.

3. Judgment and Conclusion:
The Tribunal, after considering both parties' arguments, dismissed the appeal. It held that the appellants, by choosing to export goods under the specified rules and notification, were obligated to comply with all conditions, including receiving payment in freely convertible currency. The Tribunal found no merit in the appellant's arguments against this condition and upheld the demand for duty. Consequently, the appeal was rejected, affirming the sustainability of the duty demand due to non-fulfillment of the specified export conditions, particularly the requirement of payment in freely convertible currency as per the notification.