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PJ/Case Law/2013-14/1961

Denial of the benefit of exemption notification for failure to produce the end-use certificate.

Case:-BHAGWATI CONCAST PVT. LTD. VERSUSCOMMISSIONER OF CUSTOMS, JAIPUR
 
Citation:-2013 (298) E.L.T. 425 (Tri.- Del.)

Brief fact:-The relevant facts, in brief, are that the appellant filed Bill of Entry No. 500 dated 24-9-2005 and cleared the goods of 375.260 MT of Heavy Melting Scrap of iron at nil rate of du­ty under Notification No. 21/2002-Cus., dated 1-3-2002. Condition No. 20 of the said notification is that the importer shall furnish an undertaking to the Depu­ty/Asstt. Commissioner of Customs that such imported goods will be used for the purpose specified and in the event of his failure to comply with this condi­tion, he shall be liable to pay, in respect of such quantity of the said goods as is not proved to have been so used, an amount equal to the difference between dutyleviable on such quantity. The perusal of the impugned order, it appeared that the appellant submitted end-use certificate in respect of 192.630 MT and failed to submit for the balance quantity of 183.320 MT and so the revenue authorities confiscated the said quantity and imposed redemption fine of Rs. 5 lakh and also imposed penalty.

Appellant’s contention: The appellant submittedthat balance quantity of 183.320 MT were sold to both M/s. SRM Profiles Ltd. and M/s. JR Alloys Casting Pvt. Ltd. The said two recipients of scrap have utilized the same in the production of M. S. Ingots. He drew their attention to two letters made by the said buyer to their jurisdictional Central Excise authority making prayer for issuance of end-use certificate. There is no answer to the said letters as per his knowledge.
 
Respondent’s contention:- The respondent reiterated the findings of the adjudicating authority.

Reasoning of Judgment:-On perusal of the impugned order, it appears that the appellant submitted end use certificate in respect of 192.630 MT and failed to submit for the balance quantity of 183.320 MT. The Commissioner confirmed the demand of duty in respect of 183.320 MT and confiscated the said quantity and imposed redemption fine of Rs. 5 Lakhs and also imposed penalty. They also added that they had seen those two letters, which gave reference to selling of metal scrap having received under the cover of Bill of Entry No.00500, dated 24-9-2005 i.e. the same Bill Of Entry under which the appellant imported the goods. The requirement of the notification is that the goods should be used for the pur­pose of melting and jurisdictional Central Excise Officer, under whose jurisdic­tion the said goods have been so used in such unit, end-use certificate should be produced by the appellant. It is seen that the appellant have applied for issue of such certificate to their jurisdictional Excise Officers. It is not responded by the proper officer. As rightly argued by ld. Advocate that the issue of end-use certif­icate is in the hands of proper officer after necessary verification and manufac­turer concerned having made application, cannot do anything beyond that. In view of the above reason, they set aside the impugned order and remand the matter to the adjudicating authority for afresh decision.  Needless to say that the appellant shall produce the application made by their buyers before their Jurisdictional authority, who after ascertaining the fact would issue end-use certificate. If not issued, he may call for report from the concerned officer for not issuing the said certificate till date i.e. even after lapse of five years. Thus, the appeal is disposed of by way of remand.
 
Decision:-Appeal allowed.

Comment:-The essence of the case is that for availing the benefit of any exemption notification, the conditions of that notification are to be strictly complied with. However, this decision represents the practical difficulties being faced by the assessees wherein they have made all efforts to comply with the condition of the notification but the benefit of the exemption is being denied due to non issuance of end-use certificate by the revenue authorities themselves.

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