2026-VIL-1273-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Eligibility for exemption from central excise duty on manufactured goods supplied through intermediary - Interpretation of condition requiring proof to satisfaction of Assistant Commissioner or Deputy Commissioner of Central Excise that goods are cleared for intended use - Appellant, a job worker, manufactured Aluminium Baxter Flyer without payment of central excise duty, claiming exemption under Notification 6/2006-CE dated 01.03.2006 superseded by Notification 12/2012-CE dated 17.03.2012 - The principal manufacturer supplied the goods for the intended use after subjecting them to further processing - Department issued Notice to demand duty along with interest and equal penalty contending that the appellant had not fulfilled condition 2 of the exemption notification - Whether goods manufactured by a job worker can be eligible for exemption under the notification even when the goods are further processed and subsequently supplied to the ultimate user by the principal manufacturer and whether non-intimation to the jurisdictional officer regarding clearance without payment of duty results in denial of the exemption benefit - HELD - Baxter Flyer is a crucial component used exclusively in the jute industry as a part of jute spinning frames and can only be used in a jute mill for making jute textile and cannot be used elsewhere - The condition 2 of the exemption notification requires that the goods be cleared for the intended use specified in the notification, which is goods required by a jute mill for making jute textiles - The expression intended for use is sufficiently wide to cover situations where goods manufactured by the appellant are ultimately used in a jute mill after undergoing some process of further treatment at the hands of the principal manufacturer - The Appellant has fulfilled the condition by ensuring that the goods were ultimately used only in jute mills for making jute textiles as evidenced by the invoices submitted by the Appellant showing that the principal cleared the goods to jute mills and the department has not produced any evidence to the contrary - The exemption notification does not prescribe any condition requiring prior or post intimation to the jurisdictional Central Excise officer regarding clearance of the goods without payment of duty and non-intimation to the jurisdictional officer can at the maximum be considered only as a procedural breach and the same cannot result in denial of the exemption benefit as procedural law is always subservient to and in aid to justice - The Department has wrongly interpreted the condition by importing a requirement of prior permission from the jurisdictional officer which is not prescribed in the notification itself - The demand of central excise duty is not sustainable and set aside - The questions of demanding interest or imposing penalty do not arise as the duty demanded is not sustainable - The appeal is allowed
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