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TMI Blog2015 (11) TMI 1035X X X X Extracts X X X X X X X X Extracts X X X X ..... ar without payment of duty under Notification No. 108/1995-CE dated 28.08.1995. The appellants procured the intermediate goods from M/s Jay Corp Limited, Silvasa and M/s Kanpur Plastipack Limited, Kanpur without payment of duty under Notification No. 44/2001-CE (NT) dated 26.06.2001, as amended for use in final product. The jurisdictional Central Excise Officers of the appellant, issued Annexure-I in favour of the said suppliers for supply of the materials to the appellant, without payment of duty, in terms of the said notification No. 44/2001-CE (NT) (supra) after observing the procedure under Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules 2001 (in short Rules 2001). 2. A Show Cause Notice dated 12.12.2012 was issued to the appellant proposing demand of duty alongwith interest and to impose penalty for the period 2011-2012 and 2012-2013. It has been proposed to deny the benefit of exemption Notification No. 44/2001-CE (NT) availed on intermediate goods, on the ground that the appellant had not exported the goods i.e., the resultant products, out of India. It has been alleged that the appellant failed to fulfill the conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant was issued Advance Authorization holder License to manufacture Non Woven Needle Punch Fabrics, Non Woven Geo Bags etc. and supply the goods in the project of Assam Integrated Flood and Riverbank Erosion Risk Management Programme under international competitive bidding. It is a deemed export and the goods would be cleared without payment of duty under Notification No. 108/95-CE Dated 28.08.1995. By the said Notification No. 108/95-CE, the Central Government exempted all goods from the whole of duty falling under the Schedule to the Central Excise Tariff Act, 1985, when supplied to the United Nations or an international organization for their official use or supplied to the projects financed by the said United Nations of an international organization and approved by the Government of India. In terms of the said notification, the appellant submitted certificate to the jurisdictional Central Excise Officer for availing benefit of exemption notification issued by the Chief Executive Officer, AIFRERMIP Government of Assam. For the proper appreciation of the case, a specimen copy of certificate dated 11.08.2011 is reproduced below:- To Whom It May Concern. Certificate Under Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exemption notification no. 44/2001-CE (NT) dated 26.06.2001, as amended, for procurement of the inputs namely, Polypropylene Staple Fibres without payment of duty for use in the manufacture of the finished goods cleared for the project. Notification No. 44/2001-CE (supra) as amended by notification No. 23/2009-CE (NT) dated 25.09.2009 is reproduced below:- In exercise of the powers conferred by sub rule (3) read with sub-rule (2) of rule 19 of the Central Excise (No. 2) Rules, 2001, the Central Board of Excise and Customs hereby notifies the conditions, safeguards and procedures for removal of excisable goods (hereinafter referred to as the intermediates goods) [from the place of manufacture of warehouse] without payment of duty for the purpose of use in the manufacture or processing of all articles (hereinafter referred to as the resultant articles) by a manufacturer who is an holder of a Duty Exemption Entitlement Certificate and an Advance License under the Duty Exemption Scheme (hereinafter referred to as the ultimate exporter) and their exportation out of India, to any country except Nepal and Bhutan, namely:- (i) the manufacturer of the intermediate goods holds a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sea ports at Kandla, Mumbai, Nhava Sheva, Cochin, Chennai, Visakhapatnam and Kolkata; or (b) any of the airports at Mubai, Kolkata, Delhi, Chennai and Bangalore, or (c) any of the internal container depots at Delhi and Bangalore; (viii) the goods shall be exported be exported following the procedures specified in the Ministry of Finance (Department of Revenue) Notification No. 42 /2001-Central Excise (N.T.), dated 26th June, 2001. (ix) The ultimate exporter submits within thirty days of the expiry of the period specified in the Duty Exemption Entitlement Certificate or Advance Licence or within such extended period as may be permitted by the Licensing Authority or the Committee a detailed summary of the accounts maintained in the Performa specified under the Duty Exemption Entitlement Scheme, alongwith attested copies of the shipping bills, bills of lading and the Duty Exemption Entitlement Certificate with appropriate entries made by the officers of Customs : Provided that this procedure shall also be available for the supplies made by an Advance authorization holder to a manufacturer holding another Advance authorization, if such manufacturer, in turn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of an Advance License of a DEEC (Duty Exemption Entitlement Certificate) to export the goods out of India, to any country, except Nepal and Bhutan. Notification No. 44/2001-CE (NT) (supra) was amended by Notification No. 23/2009-CE (NT) dated 25.09.2009. By virtue of amended Notification No. 23/2009-CE (NT) (supra) after sub-para (ix) and before Explanation, a proviso was inserted in Notification No. 44/2001-CE (NT). The said notification framed the procedure conditions and safeguards for removal of intermediate goods, without payment of duty under Rule 19 of Central Excise Rules, 2001 for manufacture and export by Advance License holder under DEEC Scheme. By amendment of Notification No. 44/2001-CE (NT) as on 25.09.2009, vide notification 23/2009 CE (NT) it has enlarged the scope of the notification. The effect is that the procedure as laid down in the said notification shall also be available to a manufacture of Advance Authorization holder supplies the goods to another Advance Licence Holder, who in turn, supplies resultant products to an ultimate export in terms of Para 8.3 (c) of policy. Chapter 8 of Foreign Trade Policy refers to deemed exports. Para 8.1 of the Policy pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue. It is well settled that proviso would be construed harmoniously with the opening paragraph of the notification, to which it stands. A proviso in the statute must be considered with relation to the main matter to which it stands as a proviso. In the present case, the language of the proviso is clear and there is no ambiguity. The manufacturer of Advance Licence holder supplies the material to another manufacturer, who in turn supplied the resultant products to the ICB would be covered within scope of the notification. In our considered view, it is not justified to ignore the plain meaning of the proviso and interpret in such a manner, as it would render inconsistency with and meaningless of the notification. 11. It is noticed that the DGFT by letter dated 06.03.2013 informed the Assistant Commissioner of Central Excise, Customs & Service Tax, Daman as under:- Sub:- Verification of the raw materials procured under against Advance License No. 0310694583 dated 14.05.2012 & 0310668669 dated 02.12.2011 and follow up conditions of Notification 44/2001-CE (NT) dated 26.06.2001-reg. Sir, With reference to the above subject this is to inform you that as para 8.3) of the Forei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many words. In fact, majority of judgments emphasise that exemptions are to be strictly interpreted while some of them insist that exemptions in fiscal statutes are to be liberally interpreted giving an apparent impression that they are contradictory to each other. But this is only apparent. A close scrutiny will reveal that there is no real contradiction amongst the judgments at all. The synthesis of the views is quite clearly that the general rule is strict interpretation while special rule in the case of beneficial and promotional exemption is liberal interpretation. The two go very well with each other because they relate to two different sets of circumstances." 32. In Commissioner of Sales Tax v. Industrial Coal Enterprises, (1999) 2 SCC 607, this Court has observed thus : "11. In CIT v. Straw Board Mfg. Co. Ltd. this Court held that in taxing statutes, provision for concessional rate of tax should be liberally construed. So also in Bajaj Tempo Ltd. v. CIT it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Civil Appeal No. 4908 of 2005. We have considered the aforesaid submissions with reference to record and the plethora of material produced before us by both the sides. It cannot be denied that if one has to look into the ordinary meaning of the expression 'rags' and on that basis construe the Notification in question, the assessee would not be entitled to the consessional rate of excise duty inasmuch as the waste of gunny bags or jute bags would be called 'rags' in ordinary sense of the term. However, whether case can be decided with such simplistic overtones, is the question. We are of the view that the expression 'rags' appearing in the Notification has to be construed having regard to the attendant circumstances, the context in which the same is used in the said Notification as well as the purpose for which this term has appeared in the Notification. At the same time, it is also necessary to go behind the objective for which Notification itself is issued thereby giving it a purposive interpretation, which has become cardinal rule of interpretation. In our opinion, it is only after examining all these factors that the final decision should be arrived at. (d) A.N. Sehgal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... empted under Section 5 A of the Central Excise Act, 1944. Notification No. 44/2001-CE (NT), in this case, is issued in exercise of prior Rule 19 of the Rules. Rule 19 of the Central Excise Rules permitted to export the goods without payment of duty. Sub Rule (2) of Rule 19 further permitted to removal any material without payment of duty for use in the manufacture of goods, which are exported. Central Board of Excise and Customs by virtue of power under Sub Rule (3) of Rule 19 of the said Rules framed the procedure, conditions and safeguards for removal of the goods from the factory without payment of duty for used in the exported goods. As per Clause No. (ii) of the notification, the Central Government notified to follow the procedure of Rules 2001 for removal of intermediate goods for manufacture and except of goods by holder of DEEC and Advance License. Proviso to the said notification have wider amplitude, to extend the goods cleared by on Advance Licence holder to another Advance Licence holder for use in the manufacture of export of goods to ICB, by following the procedure laid down therein. So, the submission of the Learned Authorised Representative on this issue has no forc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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