ORDER
Jeet Ram Kait, Member (T)
1. The appellant is a Public Sector Unit. The Committee of Secretaries has granted the appellant to pursue their appeals before the Tribunal, vide Order No. COD/19/2000/LC, dated 4-7-2000, a copy of which is available in the file.
2. The appellant has come in appeal against the order in Appeal Nos. 428 & 429/98 (M-III), dated 4-9-98 on the following grounds :
1.0. Mining and metallurgy are an integrated process of manufacture:
1.1. There is no dispute about the fact that the concentrates which are made out of ore extracted from our Zawar Mines by blasting the underground material by means of explosives is used in the manufacture of our prime metals, viz., Zinc and Lead. Modvat is also given on the explosives used in the mines which are situated far away from the factory. The Honourable East Zonal Bench of the CEGAT at Calcutta has allowed Modvat Credit on such explosives — vide Commissioner of Central Excise, Bhubaneshwar v. OCL (7) Ltd. in 1998 (28) RLT 643 (Page Nos. 9 to 10 of P.B).
1.2. When our supplier at Vellore did not clear the explosives under Chapter X Procedure which grants exemption, we are entitled to claim Refund as a buyer of the explosives for use in our mines — vide Ferrous Engineering v. Commissioner of Central Excise -1998 (100) E.L.T. 494 (Page Nos. 11 to 12 of P.B.).
1.3. It is also not disputed by the Department that we have borne the duty paid by our supplier. As such, we are eligible to Refund claim as a buyer, in terms of the case law cited in the preceding sub-para.
2.0. Procedural irregularities, if any, should not deny substantive exemption:
2.1. It has been laid down by this very Bench in the case of Hyderabad Allwyn Industries v. CCE -1990 (45) E.L.T. 584 that exemption is not deniable for procedural lapses under Chapter X Procedure.
2.2. In the case of Cellulose Products (India) Ltd. v. CCE, Vadodara, 1996 (82) E.L.T. 147 (Tribunal) = 1996 (12) RLT 421, North Bench similarly held that denial of benefit on the ground of non-observance of Chapter X Procedure is not justified, since non-following of procedure is a con-donable lapse. (Page Nos. 13 to 28 of P.B).
3. Shri S.V. Ratnam, learned Counsel for the appellant while reiterating the grounds of appeal invited my attention to the judgment rendered by the CEGAT, New Delhi vide Final Order No. 523-5257 2000/C, dated 5-12-2000 [2001 (127) E.L.T. 438 (T)] and Final Order No. 394/2001, dated 13-3-2001 passed by this Bench in the appellant’s own case and prayed for allowing the appeals.
4. Shri G.S. Menon, took me to the finding of the Assistant Commissioner contained in Para 4 of the Order-in-Original No. 8/97, dated 20-6-97 which is extracted herein below :
“I have carefully gone through the records of the case and their replies to the show cause notice, Notification 7/94-C.E., dated 1-3-1994 exempts goods falling under Chapter 36 from payment of duty if used in the manufacture of zinc or lead concentrates and if the use is elsewhere than in the factory of production the exemption is subject to the observance of Chapter X Procedure. In their reply the applicant have contended that mining and manufacture are an integrated activity in the extraction of Zinc concentrates and that when substantive condition were complied with mere procedural formalities should not come in the way of availing Chapter X procedure and quoted various case laws in support of their arguments. But as per Rule 192 of Chapter X of Qentral Excise Rules, 1944, the Commissioner having jurisdiction over the factory where the excisable goods utilised is the proper officer to determine whether the applicant is eligible for exemption or not. Since M/s. Hindustan Zinc Ltd. falls outside the jurisdiction of this Cornmissionerate the eligibility for exemption cannot be determined at this end. The point to be determined at this end is whether the applicant posses a valid certificate from the proper officer as required under Rule 192 of Central Excise Rules, 1944 that he is eligible to procure the said explosives without payment of duty under the said Notification. In the absence of the certificate the eligibility for refund cannot be determined at this end. It is further contended that undue enrichment is applicable only to these cases where subject goods are sold but not to the cases where they are used for captive consumption or in the manufacture. But here there is no denial of refund on the grounds of undue enrichment,”
He also took me to the order of the Commissioner (Appeals) who had asked them to furnish certificate for want of which the Assistant Commissioner had rejected their claims. The certificate produced by the appellant from the Supdt. of Central Excise, Udaipur Range dated 5-8-98 was extracted in Para 4 of the findings of the Commissioner (Appeals) and this certificate only discloses that the appellant is having a Registration Number and are availing Modvat Credit under Rules 57A and 57G of the C.E. Rules, 1944. The Appellant was required to follow statutory procedure as contained in Rule 192 which is a mandatory procedure and the appellant should have obtained CT-2 certificate from the Supdt. of Central Excise, Udaipur Range who would have certified about the eligibility of the appellant to procure explosives without payment of duty. This is not simply procedural and it in fact is a statutory procedure which is substantive in nature and where the Central Excise officers supervise each and every activity. In the absence of L-6 licence and as well as CT-2 certificate from the Range Supdt. Udaipur Range on the authority of which the appellant should have asked the manufacturer i.e. M/s. Tamil Nadu Explosives Ltd. for allowing them duty free clearance in respect of explosives, the authorities below have rightly rejected their claim. The learned SDK has submitted that the both the judgments cited by the appellant are not applicable to the facts of the present case as the facts are different and the issue to be decided is whether the Assistant Commissioner, Vellore and the Commissioner (Appeals), Chennai had the authority to grant refund in such cases and whether they have correctly rejected their plea.
5. I have carefully considered the whole case and submissions made before me. I find that the Assistant Commissioner Vellore Division, had no jurisdiction to grant refund of duty which has reportedly been paid by Hindustan Zinc Ltd., Udaipur (Rajasthan), a factory over which he does not have any control or jurisdiction. The Supdt. of Central Excise, in charge of the factory at Udaipur (Rajasthan) only should have given the CT-2 certificate on the basis of which the appellant could seek duty free clearance. I also observe that the judgments cited by the appellant are based on different facts and those judgments are not applicable to the facts and circumstances of the present case. I therefore, do not find any infirmity in the order passed by both the original authority and the lower appellate authority. The appeals are therefore, rejected.