2026-VIL-1007-CESTAT-HYD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Duty liability under Notification No. 43/2001-CE(NT) for supply of packing materials to exporters - Revenue raised a demand on the supplier, contending that since the exports by the buyers were not cleared under Bond or were exempted or subjected to Nil rate, the procurement of packing material by such exporters without payment of duty was impermissible - Whether the supplier of packing materials is liable to pay duty when the buyer/procurer has failed to comply with the conditions prescribed under Notification No. 43/2001-CE(NT) where the goods have been cleared against a valid CT-1 certificate – HELD - The liability for payment of duty arises on the procurer and not on the supplier. The notification, being issued under Rule 19 of the Central Excise Rules, 2001, prescribes a specific procedure whereby manufacturers intending to export can procure raw materials and inputs duty-free subject to conditions - The procedure requires the buyer to obtain a CT-1 certificate from the jurisdictional Assistant Commissioner after execution of a Bond. Once the supplier has cleared goods against a valid CT-1 certificate, the supplier's obligation ceases. If the procurer fails to comply with any conditions prescribed under the notification, it is the procurer who bears the liability to pay duty under Rule 6 of the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, and not the supplier who supplied the goods in compliance with the prescribed procedure - The impugned order is set aside and the appeal is allowed
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