The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the service tax exemption cannot be denied citing absence of end-use certificate.
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that as notification is a statute enacted by the Parliament which cannot be flouted by mere issuing a circular. Therefore, the board circular No. 74/1998-Cus dated 06.10.1998 is ultra vires to the Notification 23/98-Cus. dated 02.06.1998 in Sr. No.108 which does not prescribe the condition of end use certificate.
Table of Contents
Background
The appellant/assessee submitted that condition which is not prescribed in the Notification cannot be imposed by the department. The entire demand was confirmed denying the exemption notification on the ground that appellant have not submitted the end use certificate. There is no requirement of end use certificate as per Notification. Therefore, the entire order is baseless and without any authority of law.
The appellant have availed the exemption Notification No.23/98-Cus Dated 02.06.1998 under Sr. No.108 for the goods for use in the leather industry, namely Parts, consumables and other items specified in List 3(A) Other parts, consumables and items specified in List 3(B).
Issue Raised
The issue raised was whether the Commissioner (Appeals) was justified in upholding the adjudication order denying exemption under Sr.No.108 (1) of Notification No.23/98-Cus. dated 02.06.1998 for non-submission of end use certificate and where there is no condition stipulated against Sr. No.108 (1) for production of end-use certificate unlike in Sr. No.108 (2).
Conclusion – End-Use Certificate
The CESTAT while allowing the appeal held that notification under Section 25 of Customs Act, 1962 requires publication in the Official Gazette as well as requires tabling before both the Houses of Parliament and if that exercise has been carried out without any condition being imposed in Notification No. 17/2001-Cus., it would not be permissible to permit Revenue to impose such a condition by way of Circular. If the Revenue is allowed to undertake such an exercise, the requirement of publication in Official Gazette and laying a Notification before each House of Parliament would become nugatory and such a course of action is not envisaged by the Act. It would give license to the executive to bypass/override the legislature and cannot be countenanced.
Case Details
Case Title: Novelty Exports v/s Commissioner of C.-Ahmedabad
Case No.: Custom Appeal No. 319 of 2012 – DB
Date: 25.10.2024
Counsel For Appellant: Rahul Gajera
Counsel For Respondent: Tara Prakash
