9911796707
TMI Blog2003 (1) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... -3-94. The appellant were supplying HDPE pipes to the Telecom and other departments of the Government under rate contracts entered into between them and the Government. On 28-2-94 the applicants cleared certain quantities of HDPE pipes to the Government departments without payment of duty, claiming exemption under Notification No. 14/92-C.E. ibid. The Inspecting Authority (Additional Director General, DGS&D, New Delhi) had duly inspected the goods before clearance thereof from the appellants' factories in terms of the rate contracts. However, it was only on 7-3-94 that the Inspecting Authority issued its inspection notes to the appellants. The Central Excise department took the view that the appellants were liable to pay duty @ 25% (tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the factory after that period, were still entitled to exemption. 6. Ld. DR, on the other hand, submits that under the rate contracts, the goods were liable to be cleared only under cover of Inspection Notes of the Inspecting Authority. In the instant case, the inspection notes were issued admittedly on 7-3-94 only and the goods covered by the notes should have been cleared only on or after 7-3-94. Had the goods been so cleared, the duty of excise at Tariff rate would have been payable as on 7-3-94. The goods were not exempt from payment of duty of excise, exemption Notification having been rescinded on 1-3-94. Ld. DR also submits that the goods in question were cleared on 28-2-94 in violation of the mandatory provisions of the Rule 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons, the Tribunal's decision in FGP Ltd. (supra) cited by the counsel would also not be applicable to this case. 8. The only ground raised by the department in the show cause notice for demanding duty on the subject goods is that although the goods were dispatched from the appellants' factory after inspection by the Government authorities, the dispatch was not covered by Inspection Notes in terms of the rate contracts. I have perused the terms and conditions of the rate contract brought on record by the counsel. The tenor of the contract is that all supplies of excisable goods to Government departments should be preceded by physical inspection by the Inspecting Authority, who is the Director General of Supplies and Disposals, Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied. The necessary Inspection Notes were issued subsequently within a week from the date of dispatch of the goods. These Inspection Notes are in ratification of the acts of the assessee. It will, therefore, be unjustifiable to take a view in this case that the appellants acted in violation of the latter and spirit of the Contract, nor will it be reasonable to deny the benefit of exemption to the goods cleared during the period of exemption on the mere ground of delayed issuance of Inspection Notes. The plea made by the DR that the clearance of the goods was on the Budget day in violation of the provisions of Rule 224 does not merit consideration inasmuch as that was no reason in the show-cause notice to recover duty on the subject goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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