MANU/SC/0955/2010

True Court CopyTM EnglishECR

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 1631 of 2001, 1878-1880 of 2004 and 568-569 of 2009

Decided On: 18.11.2010

Appellants: Commissioner of Central Excise, New Delhi
Vs.
Respondent: Hari Chand Shri Gopal and Ors.

Hon'ble Judges/Coram:
S.H. Kapadia, C.J., B. Sudershan Reddy, K.S. Panicker Radhakrishnan, S.S. Nijjar and Swatanter Kumar

JUDGMENT

K.S. Panicker Radhakrishnan, J.

1. The question that falls for consideration in these appeals is whether a manufacturer of a specified final product falling under the schedule of the Central Excise Tariff Act, 1985 (in short "the Tariff Act") is eligible to get the benefit of exemption from remission of excise duty on specified intermediate goods as per Notification No. 121/94-CE dated 11.8.1994, if captively consumed for the 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 the Central Excise Rules, 1944 (in short 'the Excise Rules").

2. The above question was decided by the Customs, Excise and Service Tax Appellate Tribunal (in short "the Tribunal") in favour of the respondents-assessees, relying upon the judgments of this Court in Thermax Private Ltd. v. Collector of Customs (Bombay) New Custom House MANU/SC/0209/1993 : (1992) 4 SCC 440 and Collector of Central Excise, Jaipur v. J.K. Synthetics MANU/SC/1487/1999 : (2000) 10 SCC 393 on the ground of "intended use" and the principle of "substantial compliance". The matter came up before the three Judge Bench of this Court which doubted the correctness and the applicability of the above mentioned judgments and took the view that the exemption notification called for strict interpretation so far as the eligibility is concerned especially when an assessee seeks exemption of duty under a notification issued by the Central Government in exercise of the powers conferred by Sub-section (1) of Section 5A of the Central Excise and Salt Act, 1944, read with Sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Specified Importance) Act, 1957, which called for compliance of the procedure set out in Chapter X of the Central Excise Rules 1944. Further, it was also observed that in Thermax Private Ltd. (supra) and J.K. Synthetics (supra), this Court was dealt with a situation where goods were imported, from outside the country, unlike the present case where specified intermediate goods were locally manufactured, in some other units of the respondents. The Court ordered that the matter required reconsideration........