Assessee not required to comply supplementary instruction if the main exemption notification does not contain it :CESTA

By | November 3, 2015

Facts of the case ;-

Appellant is registered with the department for production/clearance of excisable goods to domestic electrical appliances namely, juicer mixer grinder (JMG), food processor, mixer grinder and electric motors. The appellants are exporting excisable a goods without payment of duty against exemption under Notification No. 42/01 ibid. Supplementary instructions were issued to Rule 19 of Central Excise Rules, 2002. The appellants filed letter of undertaking for export of goods without payment of duty but he was directed to furnish a bond as stated in supplementary instructions to Rule 19 of Central Excise Rules, 2002. The appellants did not produced that bond. Therefore, benefit of Notification No. 42/01 was denied.

Held

In the case of Minwool Rock Fibres Ltd. (supra) also the Hon’ble Apex Court held that departmental circular arc not binding on the assessee, quasi judicial authorities and courts and therefore, in that view of the matter, circular/instructions issued by Board would not assist them. Admittedly, in the case of supplementary instructions which have been issued by CBEC and the Notification No. 42/01 ibid both have been issued by Central Government and in the said notification there is no such condition. Therefore, appellant is not required to fulfill the condition imposed on him by way of supplementary instructions

CESTAT, NEW DELHI BENCH

J.D. Engineering

v.

Commissioner of Central Excise, Delhi-I

ASHOK JINDAL, JUDICIAL MEMBER

FINAL ORDER NO. 52005/2015-EX (SM)
EXCISE APPEAL NO. 51238 OF 2014-EX(SM)

JUNE  19, 2015

Ravinder Singh, Adv. for the Appellant. G.R. Singh, AR for the Respondent.

ORDER

1. The appellant is in appeal against the impugned order denying the benefit of Notification No. 42/2001 CE (NT) dated 26.6.2001 on the premise that the appellant has failed to comply with the supplementary instructions issued by CBEC in respect of availment of exemption under Notification No. 42/2001 ibid.

2. The facts of the case are that appellant is registered with the department for production/clearance of excisable goods to domestic electrical appliances namely, juicer mixer grinder (JMG), food processor, mixer grinder and electric motors. The appellants are exporting excisable a goods without payment of duty against exemption under Notification No. 42/01 ibid. Supplementary instructions were issued to Rule 19 of Central Excise Rules, 2002. The appellants filed letter of undertaking for export of goods without payment of duty but he was directed to furnish a bond as stated in supplementary instructions to Rule 19 of Central Excise Rules, 2002. The appellants did not produced that bond. Therefore, benefit of Notification No. 42/01 was denied. Aggrieved from the said order, appellant is before me.

3. Learned Counsel for the appellant submits that the supplementary instructions under Rule 19 of Central Excise Rules, 2002 were issued by CBEC and same is not mandatory as there is no condition under Notification No. 42/01 ibid to comply with the said supplementary instructions to avail the benefit of said notification. Therefore, the supplementary instructions cannot bind the appellant for availing exemption. To support this contention, he relied on the decision of Hon’ble Apex Court in the case of Sandur Micro Circuits Ltd. v. CCE 2008 taxmann.com 878 and CCE v. Minwool Rock Fibers Ltd. 2012 (278) ELT 581 (SC).

4. On the other hand, learned AR reiterated the finding of impugned order.

5. Heard the parties. Considered the submissions.

6. In this case, the short issue before me is whether the supplementary instruction issued by CBEC are mandatory for the appellant to comply with to avail benefit of Notification No. 42/01 ibid, as held by Hon’ble Apex Court in the case ofSandur Micro Circuits Ltd. (supra) wherein the Hon’ble Apex Court has held as under:

“5. The issue relating to effectiveness of a Circular contrary to a notification statutorily issued has been examined by this Court in several cases. A Circular cannot take away the effect of notifications statutorily issued. In fact in certain cases it has been held that the Circular cannot whittle down the Exemption Notification and restrict the scope of the Exemption notification or hit it down. In other words it was held that by issuing a circular a new condition thereby restricting the scope of the exemption or restricting or whittling it down cannot be imposed. The principle is applicable to the instant cases also, though the controversy is of different nature.”

7. Further, in the case of Minwool Rock Fibres Ltd. (supra) also the Hon’ble Apex Court held that departmental circular arc not binding on the assessee, quasi judicial authorities and courts and therefore, in that view of the matter, circular/instructions issued by Board would not assist them. Admittedly, in the case of supplementary instructions which have been issued by CBEC and the Notification No. 42/01 ibid both have been issued by Central Government and in the said notification there is no such condition. Therefore, appellant is not required to fulfill the condition imposed on him by way of supplementary instructions. In that view of the matter, I hold that appellant has complied with the conditions of the notification(ibid). Therefore, appellant is entitled to avail exemption under said notification. Consequently, impugned order is set aside. Appeal is allowed with consequential relief.

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