TMI Blog2019 (7) TMI 1174X X X X Extracts X X X X X X X X Extracts X X X X ..... ered in favour of the appellant that the CESTAT committed fundamental error in construing the Exemption Notification [Notification No.22/2003-C.E., Notification No.30/2015-Central Excise, Notification No.52/2003-Cus Notification No.34/2015- Cus.] as directory by condoning the lapse on the part of the assessee in destroying the manufactured goods outside the unit without permission of the concerned Authority. Appeal disposed off. - CEA. 16/2019 - - - Dated:- 25-6-2019 - Sanjay Yadav And Vivek Agarwal JJ. For the Appellant : Shri Praveen Surange For the Respondent : Shri Neerav Mainkar and Shri Girdhari Singh Chauhan ORDER With the consent of learned counsel for the parties, the matter is finally heard. This appeal under Section 35-G(1) of the Central Excise Act, 1944, is directed against the final order No. E/52953/2018 EX (DB) dated 14.09.2018 by the Customs, Excise Service Tax Appellate Tribunal, Principal Bench, New Delhi, on the following Substantial Questions of Law: i) Whether, the Appellate Tribunal was correct and justified in allowing the refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e destruction within the unit is intimated to custom authorities, and, if it is destroyed outside the unit, the same shall be with the permission of Custom Authorities; found these conditions to be directory and procedural; and held that the assessee cannot be deprived of his right for refund, as he is not liable to pay the duty, because of non-adhering to the procedural requirement. The Tribunal opined: 7. ...Resultantly, we are of the opinion that the lapse on part of the appellant was not at all substantive in nature. It was merely procedural lapse. The findings under challenge are therefore opined to be erroneous. 8. .....It is a substantive benefit of the appellant and as such cannot be denied on a mere procedural lapse on his part that too when it occurred due to no knowledge of the impugned Notification. In this factual background, the proposed substantial question of law arises for consideration, which precisely stated, would be whether the Tribunal is justified in holding that the stipulations contained in Notification No.22/2003 and amended Notification No.30/2015 are directory and not mandatory. And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to as the user industry); or (c) all goods specified in Annexure IV to this notification, when brought in connection with production, manufacture or packaging of aquaculture products for export, into export oriented undertaking in aquaculture sector ( hereinafter referred to as the user industry); or (d) all goods specified in Annexure V to this notification, when brought in connection with quarrying of granite by export oriented undertaking engaged in processing and manufacture or production of articles of granite for export (hereinafter referred to as the user industry), from the whole of,- (i) the duty of excise leviable thereon under section 3 of the Central Excise Act, 1944 (1 of 1944); (ii) the additional duty of excise, if any, leviable thereon under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); and (iii) the additional duty of excise, if any, leviable thereon under section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 ( 40 of 1978), subject to following conditions, namely:- (1) the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions and limitation as he may deem fit to impose under the circumstances of the case for the proper safeguard of the revenue interest and also subject to such permission of the Development Commissioner or the Board of Approval or the Inter Ministerial Standing Committee as the case may be, where it is exclusively required under Export and Import Policy, allow the user industry to clear any of goods for being taken outside the premises of such user industry to any other place in India, as the case may be, in accordance with the Export and Import Policy - (i) such clearance of capital goods may be allowed on payment of an amount equal to the excise duty leviable on such goods on either on the depreciated value thereof and at the rate in force on the date of payment of such duty or on the transaction value, whichever is higher. The depreciation shall be allowed at the rate of 20% per annum of the original value in respect of computer and computer peripherals items and 10% per annum in case of other capital goods; (ii) such clearance of used packing material such as cardboard boxes, polyethylene bags of a kind unsuitable for repeate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty shall be levied on such goods; Provided further that this provision shall not apply to gold, silver, platinum, diamond, precious and semi precious stones. (Emphasis supplied) (3) Notification No.52/2003-Cus dated 31.03.2003 G.S.R. 274 (E) In exercise of the powers conferred by subsection (1) of section 25 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the said Customs Act), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts,- (8) Subject to the satisfaction of the said officer, duty shall not be leviable in respect of- (i) the capital goods, if such capital goods are destroyed within the unit or outside the unit, when it is not possible or permissible to destroy the same within the unit, in the presence of Customs or Central Excise Officer; (ii) the scrap or waste material or remnants arising in the course of production, manufacture, processing or packaging, if such scrap or waste material or remnants are destroyed within the unit or destroyed outside the unit when it is not possible to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided that this condition shall not apply in case of unit engaged in manufacture and export of gold, silver, platinum, diamond, precious and semi precious stones. (Emphasis supplied) Contention on behalf of the appellant is that the Notification No.22/2003 as amended vide Notification No.30/2015 and Notification No.52/2003 as amended vide Notification No.34/2015 being exemption notification, the provisions therein are to be construed as mandatory. Reliance is placed on the decision in Eagle Flask Industries Ltd. Vs. Commissioner of Central Excise, Pune [(2004) 7 SCC 377] and the Constitutional Bench decision in Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar And Company and others [(2018) 9 SCC 1] . In Eagle Flask Industries Ltd. (supra) , it is held: 6. We find that Notification No. 11/88 deals with exemption from operation of Rule 174 to exempted goods. The notification has been issued in exercise of powers conferred by Rule 174-A of the Rules. Inter alia, it is stated therein that, where the goods are chargeable to nil rate of duty or exempted from the whol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpreted in favour of the Revenue/State. 66. To sum up, we answer the reference holding as under: 66.1 Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. 66.2 When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the Revenue. 66.3 The ratio in Sun Export Corpn. V. Collector of Customs [(1997) 6 SCC 564] is not correct and all the decisions which took similar view as in Sun Export Corpn. V. Collector of Customs [(1997) 6 SCC 564] stand overruled. On the strength of these decisions, it is urged on behalf of the appellant that the CESTAT grossly erred in construing the Notification No.22/2003-C.E., Notification No.30/2015-Central Excise, Notification No.52/2003-Cus Notification No.34/2015-Cus. as procedural and hence directory. It is urged that since trite it is that a person is p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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