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TMI Blog2010 (12) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee ) claimed SSI benefit during the period from 1-4-2001 to 31-7-2007 and hence did not pay duty of excise on their product (printed corrugated boxes). During the said period, they had not only cleared the goods to domestic industries but also cleared to merchant-exporters who used the goods as packing material for vegetables and fruits which were exported. The value of clearances of the corrugated boxes cleared to the merchant-exporters were not taken into account by the assessee in computing the aggregate value of clearances for purposes of the relevant SSI exemption notifications. Their aggregate value of clearances for home consumption for each financial year remained below the limits prescribed under the relevant SSI notification. Hence no payment of duty on the goods cleared for home consumption. The department issued show-cause notices to the assessee alleging inter alia that the corrugated boxes cleared to merchant-exporters during the material period were also liable to be accounted as clearances for home consumption and hence to be included in the aggregate value of clearances for home consumption in the context of determining whether the SSI benefit could be cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntext of dealing with the scope of export , the learned counsel has also claimed support from CCE v. Bally Jute Co., 1989 (44) E.L.T. 510 (T) and Collector of Central Excise v. Kamarhatty Co. Ltd., 1991 (55) E.L.T. 618 (T). 3. The learned Jt. CDR submits that the simplified procedure prescribed by the Board for export of goods manufactured by exempted units has to be strictly construed and followed. It is submitted that the assessee, in the instant case, did not duly follow the procedure inasmuch as the corrugated boxes which were excluded from the computation of aggregate value of clearances for purposes of SSI notification on the ground that such boxes were cleared for export were not directly exported from their factory. In this connection, the Jt. CDR has particularly referred to para 4.1.2 of Part III of Chapter 7 of Central Excise Manual of Supplementary Instructions , wherein it was laid down that H-Forms or equivalent Sales Tax Forms could be used as proof of export by exempted units and it was further clarified thus : It is clarified that this facility is available only in respect of the exempted units which undertake exports themselves or through merchant-exporters d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erchant-exporters. These facts are not in dispute. On these facts, the question arises as to whether the assessee should be required to include the clearances made to merchant-exporters also in the computation of aggregate value of clearances of specified goods for home consumption. In other words, the question is whether such clearances are liable to be reckoned as clearances for home consumption. Precisely this issue was considered by a co-ordinate Bench of this Tribunal in the case of Vadapalani Press (supra), wherein para 4.1.2, Chapter 7 of the Central Excise Manual of Supplementary Instructions was also considered alongwith certain circulars of the CBEC and it was held that the assessee in that case was entitled to reckon clearances of the subject goods (packing materials) to merchant-exporters as clearances for export and hence to exclude the same from computation of aggregate value of clearances of specified goods for home consumption under the relevant SSI exemption notifications. The decision rendered in Vadapalani Press s case was not challenged by the department. On the other hand, it was consistently followed by this Tribunal in similar cases such as Amar Packaging ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce not acceptable. We, therefore, are inclined to follow the view taken in Vadapalani Press (supra), and to allow these appeals. For the sake of brevity, we reproduce hereunder paras 5 and 6 of the judgment in Vadapalani Press : 5. After giving careful consideration to the submissions, we have found substance in the claim of the appellants that CBEC themselves had accepted Form-H certificates as proof of export vide Circulars No. 212/46/96-CX dt. 20-5-1996 and No. 648/39/2002-CX. dated 25-7-2002 and para 4.1.2, Chapter 7 of the Central Excise Manual of Supplementary Instructions 2003-04. Para 4.1.2 ibid reads as under :- In the case of export through merchant-exporter the document prescribed by Sales Tax Department will be accepted as the proof of export. Sales made by manufacturer of the goods to the merchant-exporter which ultimately are exported are exempt from Central Sales Tax. The Sales Tax Department issues booklet to the merchant-exporters containing serially numbered H-Forms/ST-XXII form or equivalent Sales Tax form. After the goods have been exported by the merchant-exporters, the latter issues these forms to the manufacturers of the goods. The merchant-exporters i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is not in dispute that the appellants obtained certificates in Form H from M/s. A.V. Thomas Co. and other similar customers and used the same before the Sales Tax authorities for exemption from payment of sales tax on the cartons sold to such customers. The Revenue has no case that the appellants did not obtain such exemption from payment of sales tax. This would mean that the Revenue has accepted the fact that the sale of printed cartons by the appellants to the said customers was a sale in the course of export of the goods out of India. The above rule contemplated export of the goods by the purchaser. By no stretch of imagination can it be said that the above rule contemplated retention of possession of the goods by the dealer (appellants in the present case) for its direct exportation from their own premises by the buyer (M/s. A.V. Thomas Co. or other similar customer in this ease). If the very physical export of the goods sold by the appellants to their customers is required to be made from the appellants premises, why should the appellants be required to gather proof of export (in the form of Form-H certificate) from their customer? We have perused a specimen Form-H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learances by the unit for the purpose of claiming the benefit of SSI exemption. The Revenue has no case that the Tribunal s decision in Radhey Paper Udyog dated 27-1-2005 was not accepted. Earlier decision to the same effect, of the learned Single Member in the case of International Corrugators (supra) was also, apparently, accepted by the Revenue. 6. In Circular No. 212/96-CX., dated 20-5-1996, the Board simplified the export procedure for SSI units. Where the export of goods cleared from SSI unit was effected through a merchant-exporter, the certificate in Form-H issued by the latter was accepted as proof of export and it was provided that, in case clearances from SSI unit for home consumption plus clearance for export, where proof of export was not furnished within 6 months, exceeded exemption limit, they should take Central Excise registration and follow the regular A.R. 4/A.R. 5 procedure. Where proof of export was furnished within 6 months, the clearances made for export were not to be added to clearances for home consumption. Circular No. 648/39/2002-CX. affirmed the position and further clarified that the above facility was available only in respect of exempted units wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e clearances for home consumption for the purposes of SSI notification for any of the financial years comprised for the period of dispute in this case. 6. Before parting with this case, we have to say something in connection with the reliance placed by the learned Jt. CDR on the Apex Court s judgment in Hari Chand Shri Gopal s case. In that case, the question considered by the Court was whether the respondent was entitled to exemption under Notification No. 121/94-CE in respect of the goods cleared by them for home consumption. The department alleged that the benefit would not be available to the party inasmuch as they had not followed Chapter X procedure as required under the above notification. Before the Apex Court, the party pleaded substantial compliance. This plea was rejected. In para 34 of the judgment relied on by the Jt. CDR, their Lordships observed to the effect that the object and purpose of the procedure laid down in Chapter X procedure and the Central Excise Rules, 1944 were not to be overlooked. In another part of its order, the Apex Court noted that the case on hand was distinguishable from that of Thermax Pvt. Ltd. v. Collector, 1992 (61) E.L.T. 352 (S.C.). The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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