2000 (2) TMI 341 - AT - Central Excise

Summary

Issues:
1. Levy of duty on exported cut tobacco under bond.
2. Compliance with Rule 196A regarding approval for export.
3. Interpretation of Rule 196A and duty liability.

Analysis:

Issue 1: Levy of duty on exported cut tobacco under bond
The reference application was filed against the Tribunal's order confirming duty demand and penalty on exported cut tobacco. The appellants argued that duty was not warranted as they had exported the tobacco under bond after obtaining necessary approvals. They contended that since the goods were already exported under bond, no duty liability should exist. The Tribunal, however, upheld the duty demand, leading to the appeal.

Issue 2: Compliance with Rule 196A regarding approval for export
The Tribunal found that the appellants did not comply with Rule 196A as they had not obtained the previous approval of the proper officer before exporting the goods. Rule 196A mandates that clearance for export must have the prior approval of the proper officer. The appellants had informed the jurisdictional Superintendent of their intention to export the tobacco but failed to provide evidence of the proper officer's approval for clearance.

Issue 3: Interpretation of Rule 196A and duty liability
The Tribunal clarified that Rule 196A allows surplus excisable goods to be cleared for export with prior approval. Despite the appellants' argument that informing the Superintendent fulfilled the requirement, the duty was deemed recoverable due to non-compliance with the rule. The Tribunal emphasized that export without the proper officer's approval subjects the goods to duty liability, regardless of subsequent procedures like draw back of duty. The duty and penalty arising from non-compliance with Rule 196A cannot be negated by export procedures post-clearance.

In conclusion, the Tribunal dismissed the reference application, affirming the duty liability on the exported cut tobacco under bond. The judgment highlights the importance of complying with the specific requirements of Rule 196A for export clearance to avoid duty liabilities, even if goods are exported under bond and other export procedures are followed.