Judgment:
1. By the impugned order the Commissioner has denied the benefit of exemption Notification No. 165/90, dated 17-12-1990 in respect of Cupro Nickel and Aluminium Magnesia strips used for the production of coins on the ground that the clearances effected prior to 7-2-1991 i.e., under GP 1 Nos. 5, 6, 34 & 35 are those which are issued even prior to application and issuance of CT 2 Certificate to the Government Mint Hyderabad.
3. On perusal of the judgment, I notice that the Commissioner has already dropped the demand for Rs. 40,447/- in respect of GP 1 Nos.
36,37,38 & 39 and also demand of Rs. 34,615/- as being time barred.
However, he has imposed penalty of Rs. 5,000/-. There is no dispute with regard to inputs having been received under Chapter X from the Government Mint Hyderabad and their obtaining L-6 licence on the ground that he has already granted the benefit in respect of it. However, in respect of the question which he has denied it on the ground that CT 2 certificate was rejected subsequently from the date of clearance. On this point, I have noticed that the issue is covered by several judgments of the Supreme Court and that of Tribunal.Hiranyakeshi Sahakari Sakkare Karkhane Niyamit v.C.C.E. as reported in 1989 (39) E.L.T. 658, the Tribunal held that the benefit of Notification No. 118/75 is not deniable for non following Chapter X procedure so long as essential requirements to establish entitlement to such benefit is satisfied. The Tribunal also held in the case of Oil India Ltd. v. Collector of Customs as reported in 1992 (57) E.L.T. 449 that the essentiality certificate even if produced subsequently is not fatal to the claim of exemption, even if such certificate itself was issued subsequent to clearances. On this point of delayed submission, the issue is now settled by several judgments as can be seen from Sahuwala Cylinders Ltd. v. C.C.E., as reported in 1991 (54) E.L.T. 135 and that of State of U.P. v. Hajismail Noor Mohd. & Co.
as reported in 1988 (3) SCC 398. These judgments have been followed in the case of Goenka Engg. & Ind. Pvt. Ltd. v. Collector of Customs as reported in 1997 (93) E.L.T. 263.Formica Indian Division v.Collector of Central Excise, as reported in 1995 (77) E.L.T. 511 held that the benefit of Notification No. 71/77 cannot be turned down on technical ground of non-compliance with Rule 56A procedure when the assessee contested the correctness of the classification and dutiability of the intermediate product, thus they could not have ordinarily complied with the procedure of Rule 56A of Central Excise Rules.Thermax Pvt. Ltd. v. C.C. as reported in 1992 (61) E.L.T. 352 the Hon'ble Supreme Court held that since the concession under Rule 192 turns only on the nature and use to which the goods are put by the user or purchaser thereof and on whether he has gone through the procedure outlined in Chapter X, it would not be correct to deny it to a supplier of such goods on the ground that he is an importer and not a manufacturer. The Hon'ble Supreme Court did not agree with the Tribunal's opinion that the assessee could not get the refund because the procedure of Chapter X of the Rule is inapplicable to the importers as such. The Hon'ble Supreme Court agree with the observations of the Board that the benefit of exemption or concession should be granted wherever the intended use of material can be established by the importer or by other evidence. It further held that this concession further does not entitle the assessee to concession claimed in both these appeals before it. But its entitlement will depend on whether the purchaser is the holder of L-6 licence (or CT 2) certificate or not.
The ratio is that a person holding L-6 licence (CT 2 Certificate) for him, the benefit cannot be denied. The Hon'ble Supreme Court clarified in the case of C.C. v. J.K. Synthetics Ltd. as reported in 1996 (87) E.L.T. 582 that the remission of duty is not available when the purchaser is not a holder of L-6 (CT 2 Certificate). Thus, it is clear that whether the party is a holder of L-6 licence or CT 2 Certificate even if the said certificate is produced belatedly the benefit cannot be denied so long as it can be established that the substantive provision has been complied. In this case the Collector himself has granted benefit in respect of GP Is, 34 and 35, but denying benefit in respect of others only on the ground that the CT 2 certificate has been issued belatedly after the clearance. As can be seen from the records and the facts of the case the issue falls within the aspect of procedural violation and there is no substantive violation in the matter. In view of the judgments on this point and ratio laid down as noted above, the appellants are entitled for the benefit in respect of GP Is, 5, 6, 34 and 35. In that view of the matter, the impugned order is set aside and the appeal is allowed.