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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 ..... e manufacture of export goods. 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. - by Notification No. 108/95-CE, the final product of the appellant is exempted from duty supplied to Assam Integrated Flood and Riverbank Erosion Risk Management Programme, which will be a deemed export as per Para 8.1 of Foreign Trade Policy. Revenue is demanding duty on the intermediate goods used in the manufacture of finished goods cleared as per Para 8.1 of policy, by denying the benefit of notification No. 44/2001-CE (NT) dated 26.06.2001 as amended. After amendment of the said Notification No. 44/2001-CE (NT) by Notification No. 23/2009-CE (NT) dated 22.09.2009, it has extended the removal of intermediate goods without payment of duty, for manufacture and export in terms of Para 8.3 (C) of policy, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 conditions of the Notification No. 44/2001-CE (NT) (supra). By the impugned order, the Adjudicating A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abrics, 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 Notification No. 108/95, dated 28.08.1995. This is certify that the work of Supply of N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Both the sides submit that in the present case, there is no dispute on eligibility of the benefit of exemption notification No. 108/95-CE (supra) in respect of clearance of the finished goods by the appellant, without payment of duty. The dispute relates to the eligibility of benefit 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely, nylon fiber, nylon yarn, nylon fabrics, polyester fiber, polyester yarn, polyester fabrics, stainless steel sheets, stainless steel strips, magnetic tapes, precious metals, metals clad with precious metals and articles thereof, be made only through (a) any of the 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 Entit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise and Customs, in exercise of power under Rule 19 (3) of the Rules, notified the conditions, safeguards, and procedure for removal of intermediate goods without payment of duty from the place of manufacture of warehouse, for use in the manufacture of processing of resultant product, who is a holder 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the proviso inserted in the said notification cannot go beyond the scope of the opening paragraph of the notification, and therefore, the appellant is not eligible the benefit of Notification No. 44/2001-CE (NT). 10. We are unable to accept the submission of the Learned Authorised Representative for the 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:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional rate should be given a liberal interpretation : 16. It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly 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 dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Seventh Edition 1999, P-163). This principle has been deduced from the decision of the privy Council in Govt. of the Province of Bombay vs Hormusji Manekji AIR 1947 PC 200 as also the decision of this Court in Durga Dutt Sharma vs Navaratna Pharmaceutical Laboratories AIR 1965 SC 980. (C) M/s Coastal Paper Ltd. Vs Commissioner of Central Excise, Visakhapatnam 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 thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded the removal of intermediate goods without payment of duty, for manufacture and export in terms of Para 8.3 (C) of policy, otherwise, the proviso inserted therein by amending notification would be nugatory and meaningless. 13. The Learned Authorised Representative for the Revenue submits the procedure under Rule 2001 would be followed in the case, where the goods are exempted 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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