1998 (11) TMI 302 - Commissioner - Central Excise

Summary

Issues:
Interpretation of Notification No. 84/94-C.E., dated 11-4-1994 as amended - Whether Chapter X procedure must be followed for clearance of raw material or if the appellants are covered under the notification exempting excisable goods.

Analysis:
The appeal was filed against the Asstt. Commissioner's order directing the appellants to follow Chapter X procedure instead of clearing raw material for processing outside and returning it for further manufacturing of the final product at NIL rate of duty as per Notification No. 84/94-C.E., dated 11-4-1994. The appellants argued that the Chapter X procedure was causing undue hardship as there was no duty involved, and they should be covered under the notification. The Commissioner noted that the dispute was whether the appellants had to follow Chapter X procedure or were covered under the notification.

The appellants, manufacturers of P.P. pumps/P.D. pumps sets, sent raw materials for casting to a job worker and used the cast material in manufacturing final products. The question was whether this process fell under the notification exempting excisable goods or required following Chapter X procedure. The Commissioner examined the text of the notification and related amendments to determine the applicability to the appellants' case.

It was found that the appellants' final product fell under a sub-heading exempted from duty, and the raw materials sent for casting were covered under different sub-headings. The Commissioner concluded that the appellants could clear raw materials to the job worker without duty payment, return the processed goods for further manufacturing, and be covered under the notification. Notably, the notification did not mandate following Chapter X procedure for availing the exemption.

The Commissioner held that the appellants were entitled to the benefit of the notification without following Chapter X procedure, as the conditions specified in the notification were met. Consequently, the appeal was allowed, and the requirement imposed by the Asstt. Commissioner to follow Chapter X procedure was deemed unwarranted and unsustainable.