TMI Blog2014 (10) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 payment of duty. Otherwise also we find that investigations were made by the Revenue with the appellants authorised representative, immediately after filing of declaration by them on 14.3.08, even then the show cause notice was issued in 2011. We find no justification for the same and agree with the learned advocate that the demand is wholly barred by limitation. The same is accordingly set aside along with setting aside of the penalties imposed upon both the appellants. - Decided in favour of assessee. - Appeal No. 877 & 876 of 2012-Ex[DB] - ORDER NO. FO/53827-53828 /2014-Ex(Br) - Dated:- 30-9-2014 - Ms. Archana Wadhwa (J) and Mr. Rakes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent of more than 25% of the installed capacity. Initially the notification did not prescribe filing of any declaration with the jurisdictional Central Excise authorities. However, with effect from 5.11.03, said notification was amended vide notification No. 76/2003 dated 5.11.2003 and the following two conditions were added. Provided that the exemption contained in this notification shall apply subject to the following conditions, namely:- (i) The manufacturer who intends to avail of the exemption under this notification shall exercise his option in writing before effecting the first clearance and such option shall be effective from the date of exercise of the option and shall not be withdrawn during the remaining part of the financial year; (ii) The manufacturer shall, while exercising the option under condition (i), inform in writing to the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise giving the following particulars, namely:- (a) Name and address of the manufacturer; (b) Location/locations of factory/factories; (c) Descrip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the necessary declaration in terms of the condition prescribed in first paragraph of this exemption notification; that subsequently, sometime in March 2008 when the appellant became aware that for availing of this exemption, they are required to file a declaration containing information, as prescribed in the first para of the exemption Notification No. 50/2003-CE, they filed the same on 14/3/08, that filing of declaration is a procedural requirement and, hence, during the period from May 2006 to 13/3/2008, the benefit of this exemption cannot be denied just for not filing the declaration when there is no dispute that the appellant were otherwise eligible for benefit of this exemption, that in any case, the duty demand raised by show cause notice dated 31/3/11 for the period from 20th May 2006 to 13/3/08 is time barred, as it is the appellant who by filing the declaration on 14/3/08 had intimated the department about their activity and their intention to avail the exemption and while in 2009 the department had conducted some inquiries by recording the statement of various persons of appellant company the show cause notice was issued only on 31/3/11; that in the circumstances of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation can be earned subject to fulfillment of the conditions enumerated therein and failure to fulfill such conditions would result in denial of benefit. 9. We have considered the submissions made by both the sides. We find that there is not much dispute about the factual position. Admittedly, the appellant started their factory with effect from 20.5.06 and the clearance was effected on 21.5.06. At that time, there was no condition in the notification No. 50/2003 as regards the option of availing the benefit to be reduced in writing. Such condition was introduced subsequently with effect from 5.11.03. It is also a fact that the appellant filed the said declaration on 14.3.2008 only. The question required to be decided in the present cases is as to whether the non-filing of declaration in terms of notification would result in denial of benefit of notification in question. The said notification, which may be broadly called as area based exemption notification, is applicable to newly established units in the specified areas, with an intent to develop those areas. There is no dispute about the fact that the appellant established a new unit in the area specified in the notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered to be a mistake fatal to the appellants claim of benefit. It is well settled law that the substantive benefit if otherwise available should not be disallowed on the basis of minor procedural irregularities. In the present case, we find that even such irregularity of non-filing of declaration was not there. Similarly in the case of Sambhaji vs. Gangabai reported as [2009 (240) ELT 161 (SC)] it was observed as under:- 9. All the rules of procedure are the handmaids of justice. The language employed by the draftsman of processual (sic) law may be liberal or stringent, but the fact remains that the object of prescribing procedure is to advance the cause of justice. In an adversarial system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the statute, the provisions of CPC or any other procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extraordinary situations in the ends of justice. 11. The processual law so dominates in certain systems as to overpower substantive rights a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclarations and other documents filed by M/s. Amar Polyfab P. Ltd. may be treated as the declarations/documents filed by M/s. Indra Polyfab P. Ltd. w.e.f. 12-10-1994. Though above noted communication is not in the form prescribed under Rule 57H but it supplies all necessary information to the department. It is undisputed that adjustment of Modvat credit by M/s. Amar Polyfab P. Ltd. was done after 14-10-1994. Therefore, we are of the view that this is a case of technical lapse for which the appellants cannot be penalized. We are supported in our view by the judgment of Hon ble Madras High Court in the matter of Chemicals and Plastics India Ltd. reported in 1993 (68) E.L.T. 728 (Mad.); Tribunal in the matter of Sushripada Chemicals reported in 1996 (88) E.L.T. 109 (Tri.) and also in the matter of TT Maps Publications reported in 1997 (90) E.L.T. 404 (Tri.). In the case of Herbal Concepts Healthcare Pvt. Ltd. vs. CCE, Meerut [2013 (294) ELT 570 (Tri-Del)] following observations were made: The Hon ble Supreme Court in the case of C.C. (Imports) v. Tullow India Operations Ltd. - 2005 (189) E.L.T. 401 (S.C.) has observed that once the assessee satisfies eligibility clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification of the various important factual position. Similarly, in the case of Indian Aluminum Company Ltd. vs. Thane Municipal Corporation reported as [1991 (55) ELT 454 (SC)] , it was observed that non-observance of even a procedural condition not to be condoned if likely to facilitate commission of fraud and introduce administrative inconveniences. Admittedly, if the condition is so important that non-observance of the same may result in fraudulent activity, such condition cannot held to be an empty formality. Similarly, the Hon ble Supreme Court in the case of State of Jharkhand vs. Ambay Cements reported as [2004 (178) ELT 55 (SC)] held that the condition of new units availing exemption from Sales Tax on purchase of raw materials and sale of finished goods requiring prior permission of Industrial department has been held to be substantial condition inasmuch as the exemption itself was based upon such permission from the Industrial department. 13. As already observed by Hon ble Supreme Court in the case of Mangalore Chemicals and Fertilisers Ltd. vs. Deputy Commissioner [1991 (55) ELT 437 (SC)], there may be number of conditions and some may be substantive, some mandatory an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kesh Kumar:- 15. While I agree with the decision of my learned sister in the order recorded by her allowing both the appeals, my agreement is confined only to allowing these appeals on the ground of limitation and not on the question of eligibility of the Appellant Company for exemption under Notification No.50/03-CE for the period prior to 14.03.08. The reasons for this, are given as under:- 16. The exemption Notification No.50/03-CE which the appellant in this case were claiming, exempts, from the whole of the duty of excise leviable under Central Excise Act, 1944 as also from the whole of the additional duty of excise leviable under Additional Duty of Excise (goods of Special Importance) Act, 1957 as well as under Additional Duty of Excise (Textile Textile Articles) Act, 1978, the goods other than the goods specified in Annexure-I of the Notification and manufactured in the Industrial Area specified in Annexure-II of the Notification. Initially the above exemption Notification issued on 10.06.03, had no condition regarding filing of any declaration. However, this Notification was amended by the Notification No. 76/03-CE dt. 05.11.03 and by this amendment two conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstalled capacity by not less than 25% on or after 07.01.2003 and has commenced commissioner production from such expanded capacity not later than 31st March 2010. In this situation also, prior declaration as prescribed in the proviso to the first para of this Notification is necessary to enable the Jurisdictional Central Excise Offices to ascertain as to whether the manufacturer is eligible for the exemption or not. Similarly the sunset date of this exemption as prescribed in para 2 of the Notification is 31.03.2010 in the sense that a new unit for being eligible for the exemption must have commenced commercial Production on or after 07.01.2003 but not later than 31.03.2010. In this situation also unless manufacturer makes a prior declaration, it would not be possible for the Jurisdictional Central Excise Officers ascertain to ascertain as to whether manufacturer had a commenced commercial production on or before the 31.03.2010, or not and accordingly is eligible for exemption or not. 16.3 From the above discussion it is clear that the declaration prescribed in proviso to para 1 of the exemption Notification is not an empty formality, as this declaration is absolutely necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Thane Municipal Corporation(Supra) referred by my learned sister in para 12 of the order recorded by her, has held that non-observance of even a procedural condition is not to be condoned for the purpose of permitting an exemption, if the same is likely to facilitate commission of fraud or introduce administrative inconveniences. 17.3 Thus the basic principle laid down in above judgments of the Apex Court is that when the exemption Notification is subject to certain conditions the fulfillment of substantive conditions is a must and if the substantive conditions have been fulfilled the observance or non-fulfillment of directory conditions which are of procedural or Technical nature can be condoned. The test for determining as to whether a condition of an exemption Notification is of mandatory/ substantive character is to examine as to whether that condition has been prescribed with a view to prevent commission of fraud or mis-use of exemption and thus avoid administrative inconveniences, or with some other policy objective. 18. In my view the condition regarding filing of declaration in the prescribed format as prescribed in the first para of the Exemption Notification has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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