C. Satapathy, Member (T)
1. Heard both sides. This appeal has been filed by the Revenue against the impugned order-in-appeal passed by the Commissioner (Appeals) setting aside the order-in-original. The applicant Commissioner has preferred the following grounds of appeal:-
"The order passed by the Commissioner (Appeals) under Section 35A is not legal and proper for the following reasons:
The manufacturer intending to clear the goods to 100% EOU against the CT-3 certificate is required to file classification list/classification declaration with the jurisdictional Asstt. Commissioner claiming exemption from the duty under the relevant notification. In the instant case the jurisdictional AC as well as the Range Supdt. issued the show cause notices to the manufacturer seeking denial of the exemption benefit of the notification on the ground that the goods mentioned in the CT-3 certificates were not covered under the annexure to the exemption notification No. 1/95-CE dated 4.1.95. The Assistant Commissioner rightly held in the O-in-O that the exemption under Notifn. No.1/95-CE dated 4.1.95 is available only in respect of goods covered in the said notification and not to the goods mentioned in the CT-3 certificates viz. locks and parts of locks falling under C.S.H. No. 8301.00, steel furniture & parts thereof falling under C.S.H. No. 9401, 9403.00. These goods under any stretch of imagination can be called as office equipments and therefore are not covered in the said notification. The item at Sr. No. 4 of the Annexure I to the notification No. 1/95-CE dated 4.1.95 covers only office equipments, spares and consumable thereof which are distinctly different than the items cleared against the CT-3.
Further, mere production of the CT-3 certificate cannot entitle the manufacturer to avail the exemption envisaged in the notification especially when the goods are not covered in the notification. Also it is a fact that the assessment of goods to duty lies with the jurisdictional Range Supdt. in charge of the manufacturing unit. Inspite of these facts the appellate authority has erroneously allowed the benefit of the exemption merely because it is covered under CT-3 certificate. The logic of allowing the benefit on this ground can lead to perverse consequence as it would mean that the Central Excise authorities having jurisdiction over the manufacturing unit will be preventing from making proper assessment if a clearance is sought on an erroneously issued CT-3 certificate. The purpose of he procedure is only to ensure that exempted goods are put to the stipulated use. It cannot be used to prevent due assessment of goods by the jurisdictional authorities."
2. The grounds of appeal has been reiterated by the learned J.D.R. at the time of hearing. The learned advocate appearing for the respondents, however, defends the impugned order and cites the following decisions in support:-
I) Godrej & Boyce Mfg. Co. Ltd. v. CCE., Mumbai - 1999 (114) ELT 118 (Tribunal)
II) CCE., Cochin v. BPL Systems & Projects - 2002 (144) ELT 437 (Tri.-Bang.)
III) CCE., Bombay v. Godrej & Boyce Mfg. Co. (Order No. E/99/1996B., dated 11.3.1996)
3. After hearing both sides and perusal of the case records, I find substance in the submissions made by the applicant Commissioner. Notwithstanding the fact that the goods were removed from the factory of the respondents on the strength of CT-3 certificate, when such goods are held not eligible for exemption under the Notification No. 1/95 dated 4.1.1995, the manufacturer has an obligation under the Central Excise Act and Rules to pay the duty on such goods. The obligation cast on the recipients of the impugned goods under the bond as per requirement under the said notification can not extinguish the obligation of the manufacturer to pay the correct amount of duty when the notification itself is not applicable.
4. If there was a finding that the recipients of the goods have met the duty liability in terms of the bond, there will be no justification to demand the duty from the manufacturer a second time. However, in the case under consideration, there is no indication that such duty liability has been met by the recipients of the goods. As such, the impugned orders passed by the lower authorities are set aside and the matter is remanded to the original authority to verify whether the duty amount has been paid by the recipients in terms of the bond or not. In the event the duty amount on the impugned goods is not paid by the recipients, the original authority will be free to proceed against the respondents for recovery of the same in terms of the legal provisions enabling recovery of the duty from the manufacturer. As such, the appeal is allowed by way of remand.
(Pronounced in Court on 24/12/03)