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TMI Blog1989 (9) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter X of the Central Excise Rules. The Indian Railways had obtained L-6 licence and had produced the necessary C.T. 2 certificates issued by the department at their end indicating that the rails are to be used in laying of tracks. The goods were cleared by the appellants from their factory under A.R. 3A forms. The appellants, however, were found not to have complied with the procedure prescribed for the purpose of the movement of the goods in all respects because the department found that the certificate of re-warehousing, which is incorporated in the A.R. 3A form, duly endorsed by the Central Excise Officers at the place of destination, was not produced by the appellants. Therefore, the jurisdictional Assistant Collector of Central Excise, Bhilai issued demands for differential duties for various amounts. In all these cases the department found that the appellants had not produced the A.R. 3A forms containing the endorsement regarding the receipt of the goods at the other end. The amounts so demanded are as follows: Appeal No. Amount Period E/79 to 93/89-B.I Rs. 6,51,83,278.10 1.5.82 to 31.10.86 E/2028 to 2062/88-B.I Rs. 5,90,95,802.62 1.2.82 to 31.12.84 E/3014 to 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this case, the actual receipt of the material at the end of the railways is essential because such receipt would precede their actual use to form railway track. Therefore, it was correct on the part of the department to insist on endorsement in the A.R. 3A forms relating to actual receipt of the materials at the other end. This would also be a pre-requisite for the Assistant Collector to be satisfied about the usage of the material for rail track, which is another condition in the exemption notification. The learned SDR further pointed out that it is not as if that the department suddenly clamped this requirement on the appellants. On the other hand, they have been given ample time and opportunities to get the A.R. 3As with the requisite endorsement and yet they had failed to do so. As regards the question of limitation, the learned SDR relied upon the case law reported in 1989 (41) E.L.T. 474 -Indian Farmers Fertilisers Co-op. Ltd. v. Collector of Central Excise, to the effect that demand under Rule 196 is not subject to the limitation under Section 11-A of the Central Excises & Salt Act, 1944. 4. We have carefully considered the submissions made by the learned counsel, the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce holder) should be made available for inspection to the jurisdictional Central Excise officer and the concessionaire is also to maintain a Register in Form R.G. 16 showing the quantity of excisable goods received and used in the industrial process. A monthly return in Form R.T. 11 is also to be submitted by the L-6 holder showing nature and quantity of material received and utilised and the commodity manufactured. We find that in this case, the Indian Railways have duly obtained a L-6 licence, L-6 No. 3/ISP/68 dated 23-10-1968. The C.T. 2 certificate has also been issued by the Superintendent having jurisdiction to them which says that the railways are licensed in form L-6 of the Central Excise range and the licence authorises to obtain rails and sleeper bars at concessional rate of duty under Notification 152/77 as amended and also states that the rails and steel sleepers are required for laying on track. It is on production of such a certificate that the appellants have cleared rail track material at the concessional rate to the railways. But the department had demanded duty on the ground that evidence of actual receipt of material at the beneficiary's end in the form of endors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses have been decided by the Tribunal in the past. One such is the case of Indian Oil Corporation Ltd. v. Collector of Central Excise, Madras -1985 (20) E.L.T. 171. In that case, the appellants were claiming exemption under Notification 287/79, which is applicable to TOFS and which is subject to following the Chapter X procedure. This benefit was denied by the department on the ground that the appellants therein had not followed the procedure set out in Chapter X because they had removed the goods under gate-passes and not A.R. 3As. It was contended on behalf of the appellants that though the clearances were not made under A.R. 3A, but on gate-passes and invoices, yet it was not a requirement under Chapter X but something which was a general practice. The Tribunal in that case noted that the recipient factories had L-6 licence and also obtained C.T. 2 certificates. Further, the certificates produced by them from the department at their end regarding utilization of the goods for the purposes specified in the notification namely manufacture of transformer oil. In these circumstances, the Tribunal held that the department should be held to have been satisfied about the actual use of T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signments removed by the appellants under the notification. No copy of that certificate is on record. However, this we find is a matter which can be independently verified by the department on their own also by reference to the receipt and accounts and utilization of the materials which are prescribed for the purpose at the beneficiary's end (RG 16) and (RT 11) and which are subject to verification by the Central Excise Officers having jurisdiction. We also observe in this regard that if any proceedings had been initiated against the railways during the relevant period for non-compliance with Chapter X procedure in respect of track material obtained from the appellants, it will also be reflected in the offence register maintained in the Range Office. No such exercise seems to have been done, and since there is also no finding at all as to how the certificate already produced by the appellants was found to be un-acceptable, we hold that it will be in the interests of justice to have the position in regard to the actual utilization verified with reference to the department's own accounts and records at the beneficiary's end, and, in the circumstances, we set aside the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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