Customs, Excise and Gold Tribunal - Tamil Nadu
Beehive Foundry Engg. Works vs Commissioner Of C. Ex. on 4 July, 1996
Equivalent citations: 1997(93)ELT490(TRI-CHENNAI)
ORDER V.P. Gulati, Member (T)
1. The issue in the appeal relates to eligibility to the benefit of exemption under Notification No. 123/81. Under this notification, the benefit has been allowed in respect of capital goods, components, raw materials, consumables, spares and packaging materials brought in the factory in connection with the manufacture and packaging of articles for 100% EOU unit subject to among other conditions that the goods required by such undertaking or for manufacture and packaging of articles are used in the manufacture of and packaging of such articles solely meant for export. The learned lower authority interpreting these conditions has held that since the goods supplied were foundation nuts and structures, etc. which are meant for raising the structures, etc., the same would not be covered by the conditions of the notification as they not used in the manufacture of goods for export.
2. The learned Counsel fairly concedes that these goods as such are not directly used in the manufacture of the goods for export but the same are used within the unit to facilitate the manufacturing of the export goods. He has cited the ruling of the Special Bench of this Tribunal in the case of Everest Building Products. Ltd. v. CCE reported in 1994 (71) E.L.T. 687 (Tribunal) and the Tribunal in the context of Notification No. 272/79, dated 18-10-1979 wherein it has held that the benefit would be available even in respect of the asbestos sheets which are used for roofing in the Kandla free trade zone. He pleaded the [position] being similar the benefit of the notification should also be allowed to the appellants.
3. Heard the learned DR.
4. We have perused the notifications i.e. 272/79 and 123/81. We observe that under both the notifications the goods required in connection with the manufacture of the goods for export purpose are allowed duty free subject to certain conditions. In the case of the ruling cited before us, under Notification No. 272/79 one of the conditions is that the goods brought in could be such as are production of goods or are used in connection with the production of the goods for export. Interpreting the words used "in connection with the manufacture" liberally the Tribunal has allowed the duty free concession in respect of asbestos sheets also. In respect of Notification No. 123/81, one of the condition is that these goods should be used in the manufacture of the goods meant for export. Admittedly, the term used "in the manufacture of has a restricted meaning, while the term used "in connection with the manufacture of" has a wider a connotation. In the above view of the matter, we hold that the learned lower authority has rightly held that the appellants would not be eligible to the benefit of the notification as claimed, as these goods cannot by a stretch of imagination be taken to be used in the manufacture of the goods. During the course of the hearing, we had put it to the learned Counsel as to under which procedure the appellant was availing the benefit of the exemption. He has pleaded a CT-3 certificate is issued in the name of the manufacturing unit i.e. export units. The question that falls for consideration is who will liable to pay duty whether the assessee who is appellant in the present case or the export unit who received the goods. We observe that the appellants supplied the goods based on a certificate issued by the central excise authorities after they were satisfied that the recipient unit was eligible to the benefit of notification. Once the goods have been cleared from his factory the appellants, in fairness, they cannot be held to be liable to pay duty for those goods unless the appellant had under taken the liability to pay duty in case these goods were not used for the purpose for which the certificate was issued. The question of liability of the appellant will have to be examined in this case. We, while holding that the goods are not eligible to the benefit of exemption, direct that the learned lower authority should examine as to whether the liability should accrue on the appellants or the recipient unit and demand accordingly. The appeal is disposed of in the above terms.