2018 (9) TMI 908 – CESTAT NEW DELHI – TMI – Refund claim – destruction of rejected inputs and expired manufactured goods – rejection of refund on the ground that destruction was not carried out in the presence of Central Excise officer and that the prior permission for taking out of the goods of the appellants units was not taken before the destruction – Held that:- Admittedly the noticee is a 100% Export Oriented Unit (EOU). Resultantly, a Notification No. 23/2003 dated 31.03.2003 as is stands amended vide Notification No. 30/2015 dated 25.05.2015 are applicable upon the appellant. As per this Notification, the duty shall not be leviable in case the capital goods or reject, waste or scrap material are to be destroyed. As per 2003 Notification, presence of Central Excise Officer was a mandate at the time of such destruction. However, after the amendment in the Notification, if the said destruction is within the unit, the intimation thereof is required to be given to the Customs Author
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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.
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Refund is to be allowed – appeal allowed – decided in favor of appellant. – Excise Appeal No. E/52165/2018 [DB] – 52953/2018 – Dated:- 14-9-2018 – Mr. C.L. Mahar, Member (Technical) Versus Mrs. Rachna Gupta, Member (Judicial) For the Appellant : Mr. Neerav Mainkar, Advocate For the Respondent : Mr. H.C. Saini, D ORDER PER: RACHNA GUPTA Present is an Appeal against the Order No. 338 dated 25.04.2018. 2. The appellant herein are engaged in the manufacturing of pharmaceutical ingredients falling under the Chapter namely organic chemicals. The refund application was filed by the appellant on 27.09.2017 before the Department submitting that they carried out destruction of rejected inputs and expired manufactured goods outside their EOU premises but under the supervision of Madhya Pradesh Waste Management Project, Pitampur District, MP which is an
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r. Neerav Mainkar, Ld. Advocate for the appellant and Mr. H.C. Saini, Ld. DR for the Department. 4. It is submitted by the appellant that an intimation about the destruction was sent to the Excise Officers as well vide the appellant s letter dated 22.12.2016. The Notification which stands amended in the year 2015 was not in the notice of the appellant at the time of destruction and the intimation was presumed bonafide, to be the only requirement for the purpose. Resultantly, the destruction was carried out outside the premises of the appellant on 24.12.2016 and 25.12.2016. It is thereafter that the Notification extending exemption to the appellant from paying duty upon the goods which are or are to be destroyed on account of being expired or no more fit for consumption, came to appellant s notice. He accordingly, applied for the refund. The Department has been alleged to have wrongly rejected the claim, on such a lapse, which is merely procedural in nature. It is impressed upon that de
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peal is accordingly prayed to be dismissed. 6. After hearing both the parties and perusing the record, we observe and hold that admittedly the noticee is a 100% Export Oriented Unit (EOU). Resultantly, a Notification No. 23/2003 dated 31.03.2003 as is stands amended vide Notification No. 30/2015 dated 25.05.2015 are applicable upon the appellant. As per this Notification, the duty shall not be leviable in case the capital goods or reject, waste or scrap material are to be destroyed. As per 2003 Notification, presence of Central Excise Officer was a mandate at the time of such destruction. However, after the amendment in the Notification, if the said destruction is within the unit, the intimation thereof is required to be given to the Customs Authorities and if it is outside the unit, a permission of Customs Authorities is required. The fact still is abundantly clear that the duty shall not be leviable on the impugned goods, appellant being an EOU. It is also apparent from the Show Caus
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t into domestic tariff area. Seeing from this angle also, the question of leviability of duty on the cleared goods does not at all arise. 7. It is also apparent from record that while removing the products from appellant s unit, intimation was given by the appellant to the Customs Authorities. No doubt as per the impugned Notification, in case of destruction outside the unit, it is not merely the intimation but the prior permission of the Customs Officer is required. But as submitted by Department, the objective of the said prior permission is the physical verification of the stock proposed to be destructed so as to avoid the revenue loss. And that despite no liability of the appellant to pay duty, he has paid the same while clearing his products for destruction to Madhya Pradesh Waste Management Project. Resultantly, it becomes clear that the prior permission or presence of the Custom Officer retains no further significance. Resultantly, we are of the opinion that the lapse on part of
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bstantive mandatory based on considerations of policy, and some others may merely belong to the area of procedure. It will be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purposes they were intended to serve. A distinction between the provisions of statute which are of substantive character and were built in with certain specific objectives or policy on the one hand, and those which are merely procedural and technical in their nature on the other, must be kept clearly distinguished. In fact, it is now a trite law that the procedural infraction of notifications/circulars etc. are to be condoned if exports have really taken place and the law is settled now that substantive benefit cannot be denied for procedural lapses. Procedure has been prescribed to facilitate verification of substantive requirements. The core aspect or fundamental requirement for debate is its manufacture and subsequent export. As long as this requirement is met, ot
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