Exemption Notification - Substantial Compliance may not be enough – Board Circulates Supreme Court Judgement
CBEC refers to the landmark judgement of the Constitutional Bench of Supreme Court in the case of M/s. Hari Chand Shri Gopal & Others - 2010-TIOL-95-SC-CX-CB. The issue involved was whether a manufacturer of a specified final product is eligible to get the benefit of exemption from remission of excise duty under chapter X of Central Excise Rules on specified intermediate goods as per notification No.121/94-CE dated 11-8-94, if captively consumed for manufacture of final products on the ground that the records kept by it at the recipient end would indicate its “intended use” and “substantial compliance” of the procedure set out in chapter X of Central Excise Rules.
The Court has held that the observation of the Tribunal that the procedure laid down under Chapter X is meant only for establishing the receipt of goods and utilization thereof by the recipient is not correct. The Judgement further held that the Tribunal completely overlooked the object and purpose of the procedure laid down under Chapter X.
Board wants the Chief Commissioners to bring this to the notice of all concerned for necessary action.
CBEC Letter F.No.384/58/2003-JC, Dated: 28th January, 2011