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2021 (6) TMI 670 - AT - Central ExciseEmpowerment to deny availment of exemption extended to indigenously manufactured goods by notification issued under Central Excise Act, 1944 - non-compliance with conditions prescribed in parallel notification issued under Customs Act, 1962 for procurement from abroad - HELD THAT:- Tax liability under Customs Act, 1962 arises upon import of goods with the importer responsible for compliance with all requirements for clearance; the liability under Central Excise Act, 1944 is, though collected on clearance, a levy on manufacture that the manufacturer assumes responsibility for. With registered status under the statute, a manufacturer, supplying goods against an exemption notification, poses lesser risk than an importer in recovery of duty foregone in the event of misuse. The procedural prescriptions stipulated for exemption from duties of customs are intended to neutralize that additional risk without causing undue inconvenience to the transaction. Imports are effected by the designated agency or their subcontractors for implementation of the project and, to them, prescribed certification is of easy access; the role of a manufacturer is limited to supply which precludes direct access to such certification. While the intended deployment and procurement through ‘international competitive bidding’ is, doubtlessly, ascertainable at the premises of the importer, the prescribing of certificate to be furnished eliminates such repeated verification of the threshold eligibility for each clearance of imports - The essence of optimal sourcing being the disregarding of customs frontiers, the enumeration of goods entitled to exemption from duties of customs does not bear replication in the exemption notification under Central Excise Act, 1944 and the condition prescribed therein should not have to be expanded beyond that limited purpose. It would be stating the obvious to point out that domestic procurement is not subject to the same risks or the verification of eligibility so burdensome as to warrant that the facilitative procedures of the notification issued under Customs Act, 1962 be replicated in the notification issued under Central Excise Act, 1944. The impugned order lacks legality for having ordered recovery of duty and imposed penalties despite the appellant having complied with conditions for availment of exemption - Appeal allowed - decided in favor of appellant.
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