CX - Asst. Commr. imposing conditions of drawal of samples of inputs and export goods is extraneous to Notfn. 43/2001-CX: CESTAT
By TIOL News Service
MUMBAI, JAN 12, 2018: CX duty demand was confirmed against the appellant in respect of the goods procured under Notification No. 43/2001-CE (NT) and used in the export goods on the ground that they had contravened the condition given in the permission as per Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001.
The appellant is before the CESTAT and in their appeal mentions that the demand was confirmed only on the ground that the Condition No.5 of the permission letter dt. 16.8.2007 was not complied with. The condition mandated that sample should be drawn for every item of input procured and finished product exported under Rule 19(2). It is their submission that this is an extraneous condition which is not flowing from either Rule 19 of CER, Notification No. 43/2001-CE(NT) or under the Rules, 2001. Also, since exports were made under self removal procedure, no sample was required to be drawn either of raw material or finished goods.
The AR supported the impugned order.
The Bench observed -
“4. On careful consideration of the submissions made by the Ld. AR and on perusal of record, I find that the appellant have followed all the conditions of Notification No. 43/2001-CE(NT) dt. 26.6.2001 issued under Rule 19 of the Central Excise Rules 2002. I find that there is no condition provided in the Rule or Notification or Concessional Duty Rules, 2001 for drawal of sample either of raw material or finished goods. Despite this, the Assistant Commissioner while giving the permission stipulated the said condition which in my considered view in extraneous condition which the Assistant Commissioner should not have imposed upon the appellant. However, even if such condition was provided merely for non-compliance of such condition, benefit of Notification No. 43/2001-CE(NT) dt. 26.6.2001 cannot be denied for the reason that the use of goods in the production and export of such final product is not under dispute. The object of allowing the duty free procurement of goods under Notification NO 43/2001-CE(NT) dt. 26.6.2001 is that the finished goods which is manufactured out of such duty free goods, should be exported. If this condition is not under dispute the benefit otherwise cannot be denied. Therefore I am of the view that merely because the condition of drawal of sample was not complied with, the benefit of Notification No. 43/2001 was wrongly denied…”
The impugned order was set aside and the appeal was allowed.