Export of duty free goods procured alongwith export goods not mandatory under N/N. 43/2001-CE

(Arising out of Order-in-Appeal No. IND/CEX/000/APP/227/2014 dated 15.9.2014 passed by the Commissioner (Appeals), Central Excise & Customs, Indore)

 Brief of the case:

• The CESTAT New Delhi in the above cited case held that procurement of duty free goods under notification no 43/2001 CE is subject to condition of the use of such goods in the manufacture or processing of goods to be exported.
• In the present case the PP bags procured free of duty under the above notification were used in packing export goods. Merely not sending PP bags alongwith export goods for the sake of convenient loading of export goods would need lead to non-use of PP bags in processing (packing) of export goods because the notification nowhere require that the duty free procured goods to be exported.

 Facts of the case:

• The assessee procured PP bags without payment of duty in terms of Notification No. 43/2001-CE(NT) dated 26.6.2001 claiming that such bags used for packing of De Oiled Cake (DOC) to be exported.
• The adjudication authority demanded duty not paid on such bags on the ground that at the port at the time of loading of goods on to the ship, DOC was taken out of these bags and loaded on the ship bulk and these bags were discarded as scrap at the port and therefore as the bags were not exported the duty foregone in terms of Notification No. 43/2001-CE(NT) became recoverable.
• Aggrieved assessee preferred an appeal before tribunal.

Contention of the Revenue: