2011 (12) TMI 451 - AT - Central Excise

Benefit of concessional Notification No. 13/98 dated 2-6-1998 - Non fulfillment of obligation of NFE - Held that - The appellant claimed benefit of exemption Notification 13/98 dated 2-6-1998. The notification grants exemption to finished products rejects and wastes or scraps produced or manufactured in an 100% EOU wholly from the raw materials produced or manufactured in India subject to some conditions - It is settled principal of law that notification granting exemption has to be strictly construed. The appellant could not fulfil the condition of the notification. Para 9.9 (b) of the EXIM Policy as they did not achieve ( ) regarding NFE which is clear from the Development Commissioner s aforesaid order. So far as the case laws cited by the appellant in the case of Vanasthali Textiles 2007 (10) TMI 303 - SUPREME COURT OF INDIA and Asian Peroxides Ltd. (2008 (7) TMI 400 - SUPREME COURT OF INDIA) is concerned the issue involved in the case was raw materials v. Consumable which is not the issue in the present case. Similarly the decision cited in the case of Ginni International Ltd. (2001 (9) TMI 165 - CEGAT COURT NO. IV NEW DELHI) relates to counting of physical exports and supply to other 100% EOUs while determining DTA sale. The decision in the case of Sabhnam Synthetics Ltd. 2002 (9) TMI 205 - CEGAT MUMBAI and Kaatyayini Exports (2003 (7) TMI 115 - CESTAT MUMBAI) relates to whether export should be prior to granting permission for DTA. Thus the case laws cited are distinguishable. Undisputedly in the instant case the Devp. Commissioner has found that the appellant could not achieve ( ) regarding NFE. The appellant could not produce anything contrary to the above nor could they produce any evidence that they have challenged the order of Devp. Commissioner. Thus the appellant has not fulfilled the condition of notification - Decided against assessee.

Summary

Issues:
- Appeal against confirmation of demand under order-in-original
- Claim of benefit under Notification No. 13/98 for DTA sale
- Denial of benefit for certain years due to non-fulfillment of NFE
- Interpretation of conditions of Notification No. 13/98
- Dispute over achievement of NFE as per EXIM Policy
- Applicability of case laws cited by the appellant

Analysis:

1. The appellant filed an appeal against the confirmation of a demand under order-in-original No. CCE/BBSR-II/No. 05-06/COMMR/2009, where the ld. Commissioner confirmed a demand of Rs. 84,61,762. The appellant, a 100% EOU engaged in manufacturing various products, applied for DTA sale under Notification No. 13/98. The Department denied the benefit due to alleged non-fulfillment of NFE for certain years.

2. The appellant contended that the goods were manufactured entirely from indigenous raw materials and were permitted for DTA sale by the Development Commissioner. They argued for exemption under Notification No. 13/98, citing a clarification from C.B.E. & C. and the conditions of the notification. The ld. Commissioner allowed the benefit for one year but denied it for other years based on alleged failure to achieve NFE.

3. The dispute centered on whether the appellant fulfilled the conditions of Notification No. 13/98, particularly regarding NFE requirements. The ld. Commissioner upheld the denial of benefits for certain years based on the appellant's failure to achieve NFE as per the EXIM Policy. The Development Commissioner's order highlighted the appellant's inability to meet NFE requirements, leading to a fiscal penalty.

4. The Tribunal noted that the appellant failed to meet the NFE criteria as per the Development Commissioner's order, which is crucial for availing exemptions under Notification No. 13/98. The Tribunal differentiated the cited case laws from the present case, emphasizing the strict interpretation of exemption notifications. As the appellant did not challenge the Development Commissioner's order or provide contrary evidence, the Tribunal upheld the ld. Commissioner's decision to deny benefits for the disputed years.

5. Ultimately, the Tribunal dismissed the appeal, citing the appellant's failure to fulfill the NFE condition as a key factor in upholding the ld. Commissioner's decision. The judgment emphasized the strict construction of exemption notifications and the importance of complying with the specified criteria for availing benefits under such notifications.

6. In conclusion, the Tribunal's detailed analysis highlighted the significance of NFE requirements in determining eligibility for exemptions under Notification No. 13/98, underscoring the need for strict compliance with the conditions specified in such notifications to avail of the associated benefits.