Benzene, Toluene, Benzol, Toluol etc. obtained in terms of Notification No. 75/84-C.E., dated 1-3-1984 for manufacture of solvents, diluents, thinners. End-use verification regarding - Central Excise - 83/5/86-CX.3

Benzene, Toluene, Benzol, Toluol etc. obtained in terms of Notification No. 75/84-C.E., dated 1-3-1984 for manufacture of solvents, diluents, thinners. End-use verification regarding F. No. 83/5/86-CX.3 Dated 11-2-1988 Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Benzene, Toluene, Benzol, Toluol etc. obtained in terms of Notification No. 75/84-C.E., dated 1-3-1984 for manufacture of solvents, diluents, thinners. End-use verification regarding. Reference is invited to this Ministry's letter F. No. 83/10/79-CX.3, dated 19th August, 1980, wherein it was clarified that the end use verification of thinners manufactured from benzene, toluene etc. procured at concessional rate of duty under Notification No. 35/73-C.E., dated 1-3-1973, was not necessary. Notification No. 35/73-C.E., dated 1-3-1973 has since been superceded by Notification No. 75/84-C.E., dated 1-3-1984, as amended. Doubts had been raised whether for the purpose of this Notification, end-use verification is obligatory when the thinners etc. manufactured from the benzene, toluene etc. procured at concessional rate, are cleared out of L-6 premises. The matter has been reconsidered since there is a clear distinction between the language used in the Notification No. 35/73-C.E., dated 1-3-1973 and the language used in the Notification No. 75/84-C.E., dated 1-3-1984 and as such end-use verification appears to be obligatory under Notification No. 75/84-C.E., dated 1-3-1984. A copy of the advice given by the Ministry of Law is enclosed for ready reference. Ministry's instructions of 1980 referred to above stand modified to this extent. Annexure Ministry of Law Justice (Deptt. of Legal Affairs) Advice (B) Section. The reference concerns interpretation of the Notification No. 75/84-C.E., dated 1-3-1984 issued in exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, as regards verification of 'end use' of the goods exempted under the said Notification. 2. With regard to the Notification No. 35/73-C.E., dated 1-3-1973, this Department had earlier advised that it was not necessary to verify end use of thinners once they were cleared out of L-6 premises, as the same was not warranted in terms of the Notification dated 1-3-1973, vide our u.o. note No. 22139/88 (B), dated 23-5-1980. 3. There is a difference in the language used in the proviso of the Notification dated 1-3-1984. The relevant part of the proviso reads as under :- "Provided that where any such exemption is subject to the intended use, the exemption in such case shall be subject to the following conditions, viz - (1) that it is proved to the satisifaction of an officer not below the rank of the Assistant Collector that such goods are used for the intended use specified in Col. 4 of the said table." 4. In the earlier Notification dated 1-3-1973, the language used in the proviso was as under- "provided an officer not below the rank of Assistant Collector is satisfied that Motor Spirit is intended for use as solvents or diluents or thinner for the manufacture of paints and varnishes, lacquer .... or use in painting." 5. It has been pointed out by the administrative Department that the Notification dated 1-3-1984 was issued with the sole objective of consolidating as many exemption notifications as possible and no special purpose or intention could be gathered from the relevant file behind the use of the words "are used for the intended use" in the Notification dated 1-3-1984. 6. Never the less, there is a clear distinction between the language used in the Notification dated 1-3-1973 and the language used in the Notification dated 1-3-1984, as soon from the words underlined in the two provisos quoted above. 7. Accordingly, even though end use verification was not necessary under the Notification dated 1-3-1973, the same appears to be obligatory under the Notification dated 1-3-1984.