1999 (6) TMI 272 - AT - Central Excise

Summary

Issues:
1. Whether the appellants were eligible for the benefit under Notification No. 356/86 for exporting a special brand of tobacco without prior approval from the proper Officer.
2. Whether the letters sent by the appellants to the Range Superintendent constituted a valid application for obtaining previous approval under Rule 196A.
3. Whether the non-compliance with the requirement of obtaining previous approval of the proper Officer under Rule 196A can be considered a procedural lapse.

Analysis:
1. The appellants, cigarette manufacturers, obtained cut tobacco under Chapter X procedure to avail benefits under Notification No. 356/86 for exporting a special brand of tobacco. The Asstt. Collector held them ineligible for benefits due to lack of prior approval for export, imposing duty demand and penalty. The appellants argued compliance with Rule 196A exempted them from duty. The Tribunal found the appellants failed to obtain the proper Officer's approval for export, thus not complying with Rule 196A and the notification's conditions. The Tribunal rejected the argument that the lapse was procedural, emphasizing the significance of obtaining prior approval.

2. The JDR referred to the Order-in-Appeal, stating the letters sent by the appellants did not constitute a valid application for previous approval under Rule 196A. The Collector (Appeals) found the approval by the proper Officer was necessary for compliance, which the appellants failed to obtain. The Tribunal concurred, emphasizing that mere communication of intention to the Superintendent was not equivalent to seeking the proper Officer's approval as required by Rule 196A.

3. The Tribunal compared the case with precedents where lack of compliance was condonable under specific circumstances. However, in this case, the Tribunal held that the appellants' failure to obtain prior approval of the proper Officer under Rule 196A was not a procedural lapse but a substantive requirement integral to Chapter X. The Tribunal confirmed the duty demand and penalty, dismissing the appeal based on the non-compliance with the statutory provisions.