M/S. Special Spring India Pvt. Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 19/CE/DLH/2013 dated 18/02/2013 passed by Commissioner of Central Excise (Appeals), New Delhi ]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Special Spring India Pvt. Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

Delhi I

Appearance:

Shri Ravinder Singh , Advocate for the Appellants

Shri A K Dhawan, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 24.2.2015

FINAL ORDER NO. A/ 50641 /2015-Ex(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order wherein the letter of undertaking was declared invalid by the lower authorities.

2. The facts of the case are that the appellant is a manufacturer exporter and obtained a letter of undertaking to export the goods. It was observed by the adjudicating authority that as per para 13.2 of Part II (2) Chapter 7 of the CBEC Manual of supplementary instruction, the exporter shall submit a statement at least once in month, in the Form specified in Annexure 19 alongwith the original copies of ARE I with due certification of export by Customs authorities at the place of export to the Divisional Office.

3. As the appellant was not filing the said statement in Annexure 19 along with proper export documents in terms of Para 1 herienabove, LOU issued to the appellant was withdrawn, same was confirmed by learned Commissioner (Appeals). Aggrieved from the said order, appellant is before me.

4. Learned Counsel for the appellant submits that as per notification No. 42/01, there is no requirement of filing the details as per annexure 19 with the department. It is only Rule 31, the chief Commissioner has power to issue supplementary instructions. The said supplementary instructions cannot overrule the notification. Therefore, later on Revenue cannot declare the LOU invalid. To support his contention. He relied on Honble Apex Court decision in the case of Sandur Micro Circuits Ltd. vs. CCE, Belgaum [ 2008 (229) ELT 641 (SC)]. wherein the Honble Apex Court has observed that exemption notification cannot be whittle down Exemption Notification and restrict scope of Exemption Notification. He also relied on the decision of this Tribunal in their own case reported as [2012 (277) ELT 356 (Tri-Del)] wherein this Tribunal dropped the penalty imposed on the appellant for not filing Annexure 19 as per special instruction.

5. On the other hand, learned AR opposed the contention of the learned Counsel and submits that as notification has been issued in Rule 19 and said instruction are also under Rule 31, therefore the special instruction are required to be followed by the appellant, admittedly they have not filed details as per annexure 19 therefore, lower authorities have rightly declared the LOU invalid.

6. Heard the parties. Considered the submissions.

7. In this case, the short issue involved before me is that whether the said instructions issued under Rule 31 shall prevail ; over the notification issued by the CBEC or not. The issue came up before the Honble Apex Court in the case of Sandur Micro Circuits (supra) wherein the Honble Apex Court has held in

5.?The issue relating to effectiveness of a Circular contrary to a Notification statutorily issued has been examined by this Court in several cases. A Circular cannot take away the effect of Notifications statutorily issued. In fact in certain cases it has been held that the Circular cannot whittle down the Exemption Notification and restrict the scope of the Exemption Notification or hit it down. In other words it was held that by issuing a circular a new condition thereby restricting the scope of the exemption or restricting or whittling it down cannot be imposed. The principle is applicable to the instant cases also, though the controversy is of different nature.

I further find that in appellants own case, wherein penalty was imposed on the appellant for non filing of Annexure 19, this Tribunal has observed as under:

3.?I have seen the provisions of Rule 31 which empowers the Boards or Chief Commissioner or the Commissioner to issue instruction providing for any incidental or supplementary matters consistent with the provisions of Act and these rules. The appellants contention is that the instructions requiring them to file submissions in Annexure 19 form are not in consistent with the provisions of the Act and Rules, Rule 27 provides for imposition of general penalty for breach of Central Excise Rules, 2002. Inasmuch as non-filing of the submissions in Annexure 19 was not the requirement in terms of said Rules, I am of the view that penalty imposed under Rule 27 may not be justified.

4.?I also note that information required to be filed in Annexure 19 was in any case available to the Revenue. As such, it remains only a technical or venial breach of provisions of rules, not resulting in any revenue loss to the exchequer. Support in this regard is drawn from the Honble Supreme Court decision in the case of Hindustan Steel Ltd. v. State of Orissa reported as [1978 (2) E.L.T. (J 159)]. As such, the penalty imposed to the extent of Rs. 5,000/- in terms of Rules 27 is not justified. The same is accordingly, set aside and appeal allowed with consequential relief.

8. In these circumstances, I hold that the appellant is not required to file details as per annexure 19 to special instruction and as such, the letter of undertaking cannot be declared invalid by the lower authorities. Therefore, I set aside the impugned order and allow the appeal with consequential relief. (dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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