1999 (8) TMI 353 - AT - Central Excise

Summary

Issues:
1. Duty demand under Rule 9(2) of CE Rules.
2. Denial of benefit of exemption Notification due to non-compliance with Chapter X procedure.
3. Allegations of suppression of fact and misstatement.
4. Applicability of previous judgments on the case.

Analysis:
1. The appeal stemmed from an Order confirming duty demand under Rule 9(2) of the CE Rules, along with a penalty, for manufacturing and clearing Die Cast Rotors without paying duty. The appellants argued these were used in manufacturing Mono Block Pumps under a specific Notification.

2. The Additional Collector denied the benefit of the Notification due to non-compliance with Chapter X procedure, citing suppression of fact and misstatement. The Chartered Accountant for the appellants contended that procedural lapses should not negate substantive benefits, referencing the Mahindra & Mahindra case and Supreme Court judgments.

3. The appellants' representative highlighted the importance of establishing the intended use of the material, as per Supreme Court rulings. The DR relied on the Kamal Cold Storage case, but acknowledged its supersession by subsequent judgments. The Tribunal noted the dispute over Chapter X compliance and referenced the Mahindra & Mahindra case, which emphasized the importance of intended use over procedural lapses.

4. Considering the precedents, including the Supreme Court rulings in the Thermex Pvt. Ltd. and J.K. Synthetics cases, the Tribunal overturned the impugned order, allowing the appeal based on the established principles regarding the benefit of exemption Notifications and the significance of intended use in such cases.