9911796707
TMI Blog2014 (10) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... cord, M/s. Surya Polypack Pvt. Ltd. (hereinafter referred to as appellant) is engaged in the manufacture of multi layer poly film printed as well as non-printed chargeable to Central Excise duty under sub-heading No. 3921 90 99 of the Central Excise Tariff, in their unit located at Integrated Industrial Estate, SIDCUL Hardwar, Uttarakhand. In terms of notification No. 50/2003 dated 10.6.2003, the goods specified in the first and second schedule to the Central Excise Tariff Act, 1985, other than those specified in the annexure I to the notification and manufactured in the industrial area specified in annexure II to the notification are exempt from whole of the duty of excise as also from the whole of additional duty of excise, leviable under Additional Duties of Excise (Goods of Special Importance) Act, 1957 as also under the Additional duty of excise (Textile and Textile Articles), Act, 1978. Inasmuch as the appellants manufacturing unit is located in the area specified in annexure II to the notification and inasmuch as the goods manufactured by the appellant were not ousted from the benefit of said notification in terms of annexure I to the notification, the appellants availed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aware of the said amendment and consequently filing of declaration was not undertaken and as they became aware of the same subsequently from the Association meeting, they on their own filed the declaration on 14.3.2008. From the date of filing of declaration, there is no dispute about the eligibility of the exemption notification to the appellant. 5. The demand in the present appeal stands confirmed for the period 20.5.2006 to 13.3.2008 on the sole ground that the appellant did not exercise their option for availing the benefit of area based exemption notification No. 50/2003-CE and as such, non-observance of the said condition of the notification would result in denial of same. Accordingly, proceedings were initiated against them by way of issuance of show cause notice dated 31.3.01 proposing confirmation of demand as also for imposition of penalties. The said show cause notice resulted in passing of the present impugned order by the Commissioner. Impugned order stand challenged by the appellant on merits as also on limitation. 6. Shri Anil Sood, learned advocate appearing for the appellant pleaded that the appellant company had established their factory in May 2006 and on 21/5/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vail the exemption under this notification has been exercised, is required to be given as per the condition in para 1 of the notification, that when a particular exemption is available subject to fulfilling certain conditions and if those conditions have not been fulfilled, the exemption cannot be allowed, that the filing of declaration cannot be said to be mere technical and procedural formality, as filing of declaration by the assessee availing of exemption under this notification is meant to enable the department to ascertain as to whether the assessee is eligible for the exemption or not, that the condition of filing of declaration is therefore a substantive condition, and since this condition has not been fulfilled during the period from May 2006 to 13/3/08, the duty exemption for this period has been correctly denied and the duty demand has been correctly confirmed, that till 13/3/08 the appellant had neither filed any declaration nor had intimated the department in any other manner about their activity and intention to avail of this exemption, that even the returns required to be filed by the units availing of exemption under Notification No. 50/2003-CE had not been filed, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion applies to the newly established units as also to the old units, which carry out 25% expansion of the installed capacity, we are of the view that said filing of declaration introduced subsequently was only mechanism for the department to assess which duty paying units would now be entitled to enjoy the benefit of exemption i.e. as to which unit has substantially undertaken expansion to the extent of 25% of the installed capacity or more. Otherwise, all newly established units in that area are entitled to the benefit of notification. Infact it may not be incorrect to observe here that assessee establish new units in the areas covered by said exemption only with an intent to avail the offered exemption. As such, filing of declaration is a formality to put the Revenue on notice as also to enable them to find out as to whether any assessee is manufacturing the excluded items as detailed in annexure I of the notification and still availing the exemption. 11. With these observations, we proceed to refer to various decisions. In the case of Packaging India Pvt. Ltd. vs. CCE, Meerut [2013 (294) ELT 246 (Tri-Del)] it was observed in para 10 as under: &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ode. A procedural law should not ordinarily be construed as mandatory, the procedural law is always subservient to and is in aid to justice. Any interpretation which eludes or frustrates the recipient of justice is not to be followed. Tribunal in the case of IPF Vikram India Ltd. vs. CCE, Ludhiana [2013 (295) ELT 421 (Tri-Del)] while dealing with the question of non-filing of declaration under merger of units, observed as under:- 10. The only issue for determination in this appeal is that when all other requirements are satisfied, whether the appellants can be denied the benefit of Modvat credit lying unutilized in the account of the company which merged with the appellants by the orders of the Hon'ble High Court, only because of the appellants failure to file declaration under Rule 57H of the Central Excise Rules and adjusting the Modvat credit in the account of merged company without seeking approval from the Commissioner. The facts in this case are not disputed by the respondent. Ld. DR has failed to point out that but for non-filing of declaration under Rule 57H of Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstantive condition. The benefit sought to be denied is on the sole ground of late filing of option. We have already held even the said procedural condition is covered by the first letter of the appellant while applying for registration. The gist of all the decisions is that when an assessee fulfills eligibility condition of the notification, the benefit of the same should not be denied on the ground of non-observance of the procedural condition. As observed by the Honble Supreme Court in the case of Sambhaji referred supra, Rules of procedure are handmaids of justice and should not ordinarily be construed as mandatory, the procedural law is always subservient to and in the aid to justice. An interpretation which eludes or frustrates the recipient of justice is not to be followed. As such, we are of the view that non-observance of the subsequent introduced condition in the notification, when the appellant was already observing and availing the benefit of notification , cannot be adopted so as to deny benefit of the notification to the appellant. In any case, by not filing the said declaration, the appellant was not in a better condition and such non-action on the part of the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercised his option to avail the benefit of notification. Only lapse on his part is to put in writing and to submit the same to the jurisdictional Central Excise authorities, for which the appellant cannot be penalized to the extent of confirming the demand for the entire period prior to filing of declaration, when he is otherwise entitled to benefit of notification which admittedly stand extended to him subsequent to filing of declaration. As such, we are of the view that confirmation of duty against the appellant is not justified. 14. Though we have held in favour of the assessee on merits, we are of the view that the demand is barred by limitation having been raised by show cause notice dated 31.3.11 for the period 20.5.2006 to 13.3.2008 invoking the extended period of limitation. In terms of section 11 A of the Central Excise Act, 1944, the extended period is available to the Revenue in case duties have not been paid by reason of fraud, suppression or any willful mis-statement with intent to avail payment of duty. When the appellant was not required to pay any duty, if they would have exercised their option in writing, where is the question of malafide intention to evade payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithdrawn during the remaining part of the financial year. Thus the first condition not only requires the manufacturer who wants to avail this exemption, to exercise the option for the availment of this exemption on writing, it also provides in clear words that such option shall be effective from the date of the exercise of option. The second condition required the manufacturer to disclose certain information while exercising the option and this information was:- a) Name and address of the manufacturer; (b) Location/locations of factory/factories; (c) Description of inputs used for the manufacture of specified goods; (d) Description of the specified goods produced; and (e) The date on which the option under this Notification has been exercised. 16.1 It is to be noted that this exemption Notification is applicable only to the goods which do not figure in the negative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l create services service administration difficulties. Not only this, as mentioned above, the proviso to para 1 of the Notification also states that option to avail of the exemption shall be effective only from the date of exercise of the option and thus the exemption is available only from the date of filing of the declaration. Therefore, the filing of the declaration has to be treated as a mandatory condition for availing of this exemption. 17. A five judge bench of the Apex Court in case of CCE Vs. Harichand Shrigopal, reported in 2010(260)ELT-3(SC), in para 22 and 23 of the judgment has held that:- (a) A Provision providing for exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the statute and the object and purpose to be achieved, and if the exemption is available on complying with certain conditions, the conditions have to be complied with; (b) The mandator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Notification has been prescribed to prevent the mis-use this exemption and to enable the Jurisdictional Central Excise Officers to detect well in time if an assessee is wrongly availing of the exemption whether deliberately or otherwise. Therefore, I do not agree with the view of my learned sister that the condition prescribed in first para of the Exemption Notification regarding filing of declaration in the prescribed fraud format is merely a procedural condition, non observance of which can be condoned. Therefore the Appellant Company is not eligible for exemption for the period prior to 14.03.08. Moreover when the notification itself provide that the option for exemption shall courts cannot extend the benefit of this exemption for the period prior to the date of opting for the exemption, therefore, on merits, the case is in the Department's favour. 19. As regards the question of limitation, it is un-disputed that while the assessee started availing of this exemption from 20.05.06 when the first clearances were made, they filed the declaration only on 14.03.08. There is no dispute that the goods being manufactured are not in the negative list of Annexure-I and the unit is loca ..... 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