M/S. Vijaya Seamless Containers Vs. Central Excise, Bangalore - Court Judgment

Excerpt:
1. this appeal is by a manufacturer of aluminium containers who availed the benefit of notification 180/88 ce dated 13.5.88 as amended which allowed a confessional rate of duty as 'nil' on aluminium containers if used for packing of liquid pesticides and if such use is elsewhere than in the factory of production, the procedure set out in chapter x of the central excise rules, 1944 is followed. the appellant had obtained a ct2 certificate from their buyers, m/s. hoechst (india) ltd., plot no.3501-15 and 6301-14, industrial estate, gidc, ankleshwar, gujarat.the ar3 form prepared for transfer of the subject goods based on the ct2 certificate discloses the receipiant warehouse to be of m/s.hoechst (i) ltd., at ankleshwar. the goods have been delivered at this address so declared. the lower authorities have denied the benefit of the exemption notification. the commissioner(appeal) has after considering the records and the subject ar3a found that since the appellants were aware of the fact that the goods were to be warehoused at evid & company and not hoechst (i) ltd., shows the goods to be delivered there and the entries made in the rg16 register at the premises of m/s. hoechst (i) ltd., notwithstanding the conditions of rule 173n have been violated since the goods were not warehoused in the factory indicated on the ct2 certificate and since m/s. evid company & chemicals ltd., were not possession of ct2 certificate. he found no infirmity in the order of the ac and did not consider the plea of technical irregularity and upheld the order of the demand of duty by denial of the credit.2. we have heard learned advocate, shri m.s. srinivasa, for the appellant who reiterates the grounds taken in appeal which are: (a) the goods have been received and entered in the rg16 register of m/s. hoechst at ankleshwar. (b) the substantive conditions of chapter x have been satisfied and relied of the notification 180/88 had been complied with. he relies on orissa warehousing volunteers services vs. cce? bhuvaneshwar, 1998 (99) elt 570 which relied on the supreme court decision in the case of thermax pvt. ltd., 1992 (61) elt 352 to submit that when there is no allegation and nor finding that the goods have not been used for packing liquid pesticides the benefit of the notification cannot be denied. (c) since the appellants in the present case are l-4 holders and have cleared the goods after obtaining the ct2 certificate a demand of duty if at all could be made it should have been made on m/s. hoechst (i) ltd., the l-6 holders who have misused the benefit of the notification if any. for this purpose he relied on cce guntur vs. fero alloys corporation 1994 (71) elt 931 and ibp company ltd., 1999 (110) elt 960.3. the learned jdr shri thomas george appeared for revenue. reiterates the findings of the lower authorities and submits that the appeal should be dismissed as the demands of the duty have been correctly made after considering the pleas of the appellants. (a) in view of the law on chapter x compliance as laid down by the supreme court in the case of thermax (1992 (61) elt 352 sc), which has been consistently followed by the tribunal and is binding on us we would in the acts and circumstances of the case not find any reason to confirm the duties, since no finding have been arrived at that the goods i.e. aluminium containers have not been used to pack liquid pesticides at m/s. avid & company chemicals premises at ankleshwar, who are stated to be the lone licencies of hoechst (i) ltd. (b) there is force in argument that the demand, when goods have been cleared on ct2 to l-4 holders have to be made on l-6 holders. since we are deciding that there was no case on making any demand on the l-4 holder, also. we would not make nay observations on this submission, which has been well stated and held so by the tribunal in the series of decisions.5. in view of our findings we set aside the orders of the lower authorities and allow the appeal with consequential benefit, if any, as per law.

Judgment:
1. This appeal is by a manufacturer of Aluminium containers who availed the benefit of Notification 180/88 CE dated 13.5.88 as amended which allowed a confessional rate of duty as 'NIL' on aluminium containers if used for packing of liquid pesticides and if such use is elsewhere than in the factory of production, the procedure set out in Chapter X of the Central Excise Rules, 1944 is followed. The appellant had obtained a CT2 certificate from their buyers, M/s. Hoechst (India) Ltd., Plot No.3501-15 and 6301-14, Industrial Estate, GIDC, Ankleshwar, Gujarat.

The AR3 form prepared for transfer of the subject goods based on the CT2 certificate discloses the receipiant warehouse to be of M/s.

Hoechst (I) Ltd., at Ankleshwar. The goods have been delivered at this address so declared. The lower authorities have denied the benefit of the exemption notification. The Commissioner(Appeal) has after considering the records and the subject AR3A found that since the appellants were aware of the fact that the goods were to be warehoused at Evid & Company and not Hoechst (I) Ltd., shows the goods to be delivered there and the entries made in the RG16 register at the premises of M/s. Hoechst (I) Ltd., notwithstanding the conditions of Rule 173N have been violated since the goods were not warehoused in the factory indicated on the CT2 certificate and since M/s. Evid Company & Chemicals Ltd., were not possession of CT2 certificate. He found no infirmity in the order of the AC and did not consider the plea of technical irregularity and upheld the order of the demand of duty by denial of the credit.

2. We have heard learned Advocate, Shri M.S. Srinivasa, for the appellant who reiterates the grounds taken in appeal which are: (a) The goods have been received and entered in the RG16 Register of M/s. Hoechst at Ankleshwar.

(b) The substantive conditions of Chapter X have been satisfied and relied of the Notification 180/88 had been complied with. He relies on Orissa Warehousing Volunteers Services Vs. CCE? Bhuvaneshwar, 1998 (99) ELT 570 which relied on the Supreme Court decision in the case of Thermax Pvt. Ltd., 1992 (61) ELT 352 to submit that when there is no allegation and nor finding that the goods have not been used for packing liquid pesticides the benefit of the Notification cannot be denied.

(c) Since the appellants in the present case are L-4 holders and have cleared the goods after obtaining the CT2 certificate a demand of duty if at all could be made it should have been made on M/s.

Hoechst (I) Ltd., the L-6 holders who have misused the benefit of the Notification if any. For this purpose he relied on CCE Guntur Vs. Fero Alloys Corporation 1994 (71) ELT 931 and IBP Company Ltd., 1999 (110) ELT 960.

3. The learned JDR Shri Thomas George appeared for Revenue. Reiterates the findings of the lower authorities and submits that the appeal should be dismissed as the demands of the duty have been correctly made after considering the pleas of the appellants.

(a) in view of the law on Chapter X compliance as laid down by the Supreme Court in the case of Thermax (1992 (61) ELT 352 SC), which has been consistently followed by the Tribunal and is binding on us we would in the acts and circumstances of the case not find any reason to confirm the duties, since no finding have been arrived at that the goods i.e. Aluminium Containers have not been used to pack liquid pesticides at M/s. Avid & Company Chemicals premises at Ankleshwar, who are stated to be the lone licencies of Hoechst (I) Ltd. (b) There is force in argument that the demand, when goods have been cleared on CT2 to L-4 holders have to be made on L-6 holders. Since we are deciding that there was no case on making any demand on the L-4 holder, also. We would not make nay observations on this submission, which has been well stated and held so by the Tribunal in the series of decisions.

5. In view of our findings we set aside the orders of the lower authorities and allow the appeal with consequential benefit, if any, as per Law.