ORDER
S.L. Peeran, Member (J)
1. This appeal arises from the Order in-Original No. 44/91, dated 13-5-1991 passed by the Additional Collector of Central Excise confirming duty demand of Rs. 1,42,333.93 under Rule 9(2) of the CE Rules read with Section 11A besides imposing penalty of Rs. 2,000/- on the appellants in terms of Rule 9(2), 173Q and 226 of the CE. Rules, 1944.
2. Appellants were alleged to have manufactured and cleared Die Cast Rotors falling under Heading 8503.00 without payment of duty, without following any procedure and suppressed the fact of the said manufacture and clearance from the department. The appellants contended that this Die Cast Rotors were used in the manufacture of Mono Block Pumps in terms of Notification No. 142/88, dated 18-4-1988.
2. The learned Additional Collector had held that benefit of the Notification was not available as the appellants had not followed the Chapter X procedure as contained in the CE. Rules. He has also not disputed the fact that the item in question was being used in the manufacture of Mono Block Pump which was exempted, but as the appellants have not followed procedure outlined under Chapter X, they are not entitled to the benefit. He has also held that there lfras suppression of fact, mis-statement and non following of the rules and hence he invoked the provisions of Section 11A for demand of duty.
3. The Chartered Accountant appearing for the appellants submits that the benefit of exemption Notification cannot be denied to the appellants on the sole ground that they did not follow the Chapter X procedure. He submits that non following the Chapter X procedure is only a procedural lapse and not substantive and therefore, the substantive benefit contained in the Notification cannot be denied to them. He also relied upon the ruling of the CEGAT in the case of Mahindra & Mahindra v. C.C.E. as reported in 1999 (31) RLT 257. He submits in this judgment, large number of judgments have been cited including the judgment of Hon’ble Supreme Court on this point in the case of Thermex Pvt. Ltd. v. CC as reported in 1992 (61) E.L.T. 352 (S.C). He also cites the judgment in the case of Kamal Cold Storage Pvt. Ltd. as reported in 1987 (31) E.L.T. 754 which has been distinguished by the Bench and has clearly held that this judgment and the judgment in the case of Agrico Engg. Works v. CCE as reported in 1994 (72) E.L.T. 689 are no longer relevant in view of the Supreme Court judgment in the case of J.K. Synthetics Ltd. as reported in 1996 (87) E.L.T. 582. The Hon’ble Supreme Court further clarified that the benefit of exemption notification is available and the concession should be granted in case the intended use of material can be established by the importer or by evidence. He submits that there was no dispute about the intended use of the material in the Mono Block Pumps and hence non grant of benefit is not correct and the impugned order needs to be set aside.
4. Shri S. Kannan, learned DR relied upon the decision rendered in the case of Kamal Cold Storage Pvt. Ltd. (supra) which has laid down a different proposition. However, he concedes that in the Mahindra & Mahindra case (supra), the Tribunal has already clarified that the judgment in the case of Kamal Cold Storage (supra ) is no longer a good law in view of the Supreme Court judgment in the case of Thermex Pvt. Ltd. (supra).
5. On consideration of the submissions made and on perusal of the impugned order we notice that the dispute arises that the appellants had not followed the Chapter X procedure and on that ground the benefit of the Notification has been denied. We find that the Tribunal in the case of Mahindra & Mahindra (supra) which in turn relied upon a large number of judgments including the judgment of the Supreme Court in the case of Thermex Pvt. Ltd. (supra) which in effect over ruled the earlier judgment on this point in favour of the Revenue in the case of Kamal Cold Storage. We further find that the judgment in the case of J.K. Synthetics has been reaffirmed by the Supreme Court in the case of Thermex Pvt. Ltd. (supra). In this view of the matter, applying the ratio above noted judgments, we set aside the impugned order and allow the appeal.