Availability of Exemptio benefit when required certificate submitted belatedly due to delay by Issuing Authority

PJ/Case Laws/2011-12/1489

Case: ENAR CHEMIC PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, VADODARA

Citation: 2011 (274) E.L.T. 221 (Tri. - Ahmd.)

Issue:- Availability of benefit of exemption under Notification No. 234/86-C.E. to Bulk drugs - Belated submission of required Certificate of Drug Controller of Govt. of India – delay due to concerned authorities – appellant vigorously pursuing for issuance of certificate – benefit not deniable.

Brief Facts:- For the period from 1-3-1986 to 19-11-1987, wherein the appellant were charged to have not discharging of their duty liability on the product "Di-calcium Phosphate" on the ground that appellant did not produce certificate from the Drug Controller of India as regards the eligibility of the said product for the benefit of Notification No. 234/86-C.E. Appellant contested the show cause notice. The adjudicating authority did not agree with the contentions raised by the appellant and confirmed demand and also imposed penalties and also demanded interest on the amounts confirmed.

Appellant’s Contention:- That appellants were pursuing with the Drug Controller of India for issuance of certificate from the date they were informed by the lower authorities for producing such certificate, he would draw our attention to a letter dated 14-12-1987 and further followed up by a letter issued by them to Drug Controller of India for issuance of certificate as required under the Notification No. 234/86. The Appellant would also our attention to the last letter written by the office of the Superintendent of Central Excise on 1-1-1988, issued by the office of Deputy Commissioner of Central Excise, Vadodara directing the appellants to produce the requisite certificate within one month from the date of receipt of such letter. The Appellant would also drew our attention to the certificate issued by the Drug Controller of India, which was dated 15-2-1988, which was submitted by the assessee to the Revenue authorities on 20-2-1988. It is his submission that the time lag from the date of receipt of letter from the Deputy Collector of Central Excise, Vadodara and time taken by them for submitting the Drug Controller's certificate was due to the fact that the said certificate was to be issued by an outside agency. He submits that the Hon'ble Gujarat High Court in the case of IFFCO v. 1101 - 1995 (75) E.L.T. 218 (Guj.), in para‑ graph 9 has clearly held and settled the law that the condition, fulfilment of which depends partly on the person and partly on the outside agency, cannot be said to be a mandatory condition. It is also his submission that Apex Court in the case of Commissioner of Customs (Imports) v. Tullow India Operations Limited – 2005 (189) E.L.T. 401 (S.C.) has clearly held that substantial provisions were stand complied with when once the certificate, which is required is produced before the authorities.

Reasoning of Judgment:- The Tribunal found that it is not in dispute that appellant's product "Di-calcium Phosphate" is a bulk drug and is eligible for the benefit of Notification No. 234/86-CE., dated 3-4-1986, subject to the condition that certificate from the Drug Controller of Govt.of India is produced within a period as the said officer may allow. It can be seen from the above reproduced certificate, the Drug Controller of India indicated in the above said certificate that this certificate is issued by them in furtherance of a letter from the appellant dated 14-12-1987.

It is also to be noted that the last letter directing the appellant to produce certificate within a period of one month was issued by the office of the Deputy Collector of Central Excise and Customs on 1-1-1988. It can be seen that the appellant was vigorously pursuing with the concerned authorities for issuance of certificate. The said certificate having been issued belatedly by the authorities, in our view, cannot be held against the appellant for denying them the benefit, for which otherwise he is eligible.

We are fortifying in our above view by the judgment of Hon'ble Gujarat High Court in the case of IFFCO v. U01 (supra), the ratio of the same as contained in Para 9, is respectfully reproduced :-"It is thus clear that an exemption Notification has to be construed in the light of the contents thereof. As aforesaid the Notification at Annexure 'A' postulates three conditions for earning the exemption provided thereunder. The first two conditions have to be complied with in full in order to earn the exemption thereunder. Payment of contribution in the aforesaid fund is a condition precedent for claiming the exemption.

It is also noted by the Apex Court in the case of Commissioner of Customs (Imports), Mumbai v. Tullow India Operations Limited - 2005 (189) E.L.T. 401 (S.C.), and specifically held in Paras 29 and 30, which, we with respect reproduce :- "29. Both the Customs Department and Ministry of Petroleum and Natural Gas are departments of the Central Government. The substantive provisions which were required to be complied with for the purpose of obtaining the benefits under the said exemption notification have indisputably been complied with. It is not the case of the department that the assessee has anything to do with the grant of certificate except to pursue the matter to the best of its abilities. It is not in dispute that the importers were, but for production of the certificate, otherwise entitled to the grant of benefit in terms of the said notification. 30. The conditions referred to in sub-section (1) of Section 25 as regard time when such certificate is to be produced would, thus, mean those which were within the control and power of the importer. If it is not within the power and control of the importer and depends upon the acts of other public functionaries, non-compliance of such condition, subject to just exception cannot be held to be a condition precedent which would disable it from obtaining the benefit there from for all times to come."

In view of the foregoing, we find that the impugned order is unsustainable and liable to set-aside. The impugned order is accordingly, set-aside and appeal is allowed.

Decision:- Appeal Allowed.

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PJ/Case Laws/2011-12/1489

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