1997 (9) TMI 296 - AT - Central Excise

Summary

Issues:
Extension of benefit of exemption Notification No. 203/92 to "Card Board" claimed by the appellants as "Art Board" for manufacturing export product under value-based Advance Licence.

Analysis:
The main issue in this case revolves around the denial of the benefit of exemption Notification No. 203/92 to the product "Card Board" by the Revenue, contending that it is actually "Art Board" due to being coated on both sides. The Department based its decision on a market-enquiry mentioned in the Commissioner's Order. However, the Tribunal remanded the matter to the Commissioner to disclose the market-enquiry to enable the appellants to respond adequately. The subsequent Order again denied the benefit, this time relying on two letters from the appellants, which the appellants argued were irrelevant and contrary to the Tribunal's directions. The appellants also cited a clarification from the Ministry of Finance regarding the interpretation of the term "required" in the Notification, emphasizing that the imported goods should be usable in the export product, which the Revenue failed to prove. The appellants sought to set aside the impugned order and extend the benefit of the notification.

On the opposing side, the learned JDR for the Commissioner highlighted that the appellants had agreed to clear the goods by paying duty in their letters and did not retract them even before the show cause notice. The Commissioner's observations noted that the appellants acknowledged that the imported goods were not the same as the "Card Board" ordered by them and failed to provide evidence from the Tea Board, the competent authority for Packet Tea export approval.

The Tribunal carefully examined both parties' contentions and found that the Revenue's case was initially based on an undisclosed market-enquiry, which the Commissioner failed to disclose despite the Tribunal's direction. Instead, the Commissioner relied on the two letters from the appellants and negative circumstances without complying with the Tribunal's order. The Tribunal emphasized that the Revenue cannot enhance its case without specific Tribunal direction and deemed the reliance on the two letters unwarranted. Moreover, the Tribunal clarified that the imported goods need not be physically incorporated in the export product, as long as they are usable in it, as per the Notification. Consequently, the Tribunal set aside the impugned order and allowed the appeal, extending the benefit of Notification No. 203/92 to the appellants.

Additionally, the learned Consultant requested expedited release of the goods held by the Revenue, which the Tribunal granted, directing the Revenue to implement the order within one month of receipt.