Custom, Excise & Service Tax Tribunal
M/S.Escorts Construction Equipment ... vs Cce, Delhi-Iv on 11 October, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
SCO 147-148, SECTOR 17-C, CHANDIGARH-160017
DIVISION BENCH
Court-I
Appeal No.E/249/2009
(Arising of OIO No.37/PKJ/Adjn/2008 dt.30.10.08 passed by the CCE, Delhi-IV)
Date of hearing/Decision:11.10.2017
M/s.Escorts Construction Equipment Ltd. Appellant
Vs.
CCE, Delhi-IV Respondent
Present for the Appellant: Shri R.K.Hasija, Advocate Present for the Respondent: Shri Tarun Kumar, AR Coram: HonbleMr. Ashok Jindal, Member (Judicial) HonbleMr.Devender Singh, Member (Technical) FINAL ORDER NO. 61977/2017 PER: ASHOK JINDAL The appellant is in appeal against the impugned order wherein the benefit of exemption notification No.108/95-CE dated 28.08.1995 was denied to them.
2. The brief facts of the case are that the appellant is engaged in the manufacture of Excavator Loaders and Earthmoving Machinery which have been cleared by them for projects to the contractors availing benefit of exemption Notification No.108/95 dated 28/08/1995 for execution respective projects financed by the United Nations or an International Organisation approved by Government of India, subject to certain conditions relating to production of certificate from specified authorities. From the records, it was found that the goods were not supplied to the project or Project Implementing Authority but to the contractors who continued to the owner of the said goods even after the completion of the project. In these set of facts, the show cause notice were issued to the appellant to deny the benefit of exemption Notification No. 108/95 ibid. Consequently, demand duty along with interest and imposed penalties. The matters were adjudicated, demand of duty along with interest were confirmed. They were denied benefit of the exemption Notification 108/95 and penalties were also imposed. Aggrieved from the said orders, the appellant is before us.
3. Learned Counsel for the appellant submits that in the appellants own case for the earlier period, this Tribunal has decided the issue vide Final Order No.60092-60093/2017 dated 12.1.2017 has allowed the benefit of of exemption Notification No. 108/95 dated 28/08/1995 to the appellant. Therefore, the issue is no more res integra, the appeal be allowed.
4. Heard both sides and considered the submissions.
5. We find that in the appellants own case for the earlier period, this Tribunal has observed as under:
4. As identical issue came up before this Tribunal in the case of M/s JCB India Ltd. in Appeal No. E/1063/2008, vide Final 61842/2016 dated 21.12.2016 of this Tribunal observed as under:
We have seen the Notification No. 108/95, which is reproduced as under:
Exemption to goods supplied to UN or an International Organisation In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise and Salt Act, 1944, ( 1 of 1944) read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of special importance) Act, 1957 (58 of 1957), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all goods falling under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the said goods) when supplied to the United Nations or an international organisation for their official use or supplied to the projects financed by the said United Nations or an International organisation and approved by the Government of India, from the whole of-
(i) The duty of excise leviable thereon under section 3 of the Central Excises and Salt Act, 1944 (1 of 1944); and
(ii) The additional duty of excise leviable thereon under sub-section (1) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957):
Provided that before clearance of the said goods, the manufacturer produces before the Assistant Commissioner of Central Excise having jurisdiction over his factory, a certificate from the United Nations or an International Organisation that the said goods are intended for official use by the said United Nations or the said International Organisation or are to be supplied to a project financed by the said United Nations or the said international organisation and the said project has duly been approved by the Government of India.
Explanation: For the purpose of this notification, international organisation means an international organisation to which the Central Government has declared, in pursuance of section 3 of the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947); that the provisions of the Schedule to the said Act shall apply.
9. On going through the contents of the above notification, we find that the appellant is entitled for benefit of Notification No. 108/95, if the goods are supplied to projects financed by United Nations or International Organisation and approved by the Government of India. Admittedly, in the case in hand, the projects have been financed by the International Organisation i.e. Asian Development Bank and the same have been approved by the Government of India. It is also a fact on record, the appellant has produced necessary certificate from the Project Implementing Authority to avail benefit of Exemption Notification. As all the conditions of the Notification have been satisfied by the appellants, therefore, the appellant is entitled for benefit of the above Notification. Merely, on the ground that the goods have been supplied to the contractor directly who has executed the project in question and after the implementation of the products the machine shall remain with the property of the contractor cannot be reasons to deny the benefit of notification as held by this tribunal in the case of Caterpillar India Pvt. Ltd. (supra) wherein this Tribunal has observed as under:
3. It is not the case of the department that the goods have not been supplied to the projects financed by international organisations. The goods were supplied to various sub contractors for the Golden Quadrilateral Project financed by Asian Development Bank. Goods have also been used for the project. The Notification nowhere stipulates that the excisable goods supplied should be directly paid for the organisation financing the project. Since the goods have admittedly been used for the project, the question of misuse of goods for unintended purposes, as noted by the Commissioner, does not arise. The fact that after the projects are implemented, the sub-contractors are entitled to retain the goods supplied to them under the notification cannot result in denial of benefit of exemption under the notification to the appellants. We are supported in our view by the Larger Bench decision of the Tribunal in Toyo Engineering India Ltd. V. CC, Mumbai- 2000 (122) ELT 315 in which it has been held that the mere fact that the construction machinery used in the initial setting up of the specified plant could possibly be used subsequently elsewhere in the setting up of another plant will not debar the importer from the facility of project import. There is also no evidence in the present case that the goods in question were used in any other project after the implementiation of the Golden Quadrilateral Project. There is also no requirement under the Notification that the entire cost shall be borne by the International Organisation, as held by the Tribunal in Nestor Pharmaceuticals Ltd. V. CCE, Delhi-2000 (116) ELT 477.
Which has been affirmed by the Honble Madras High Court reported in 2013 (297) ELT 8 (Mad.) has observed as under:
6. considering that the goods had admittedly been used in the project and after the completion of the projects, the goods supplied to the various sub contractors were entrusted to retain the goods supplied could not stand in the way of granting, the exemption under the Notification.
8. We do not find any justifiable ground to interfere with the order of the Cestat based on a factual finding and there was no material placed by the Revenue on the allegations of the possible misuse of the goods for unintended purposes by the sub contractors. Secondly, being the beneficial Notification issued in public interest and the project itself being executed fully by the contractors as per the directions of the project implementing Authority, the fact that the machineries were not given directly to the project implementing authority but given to the agency executing the work in fact cannot go against the assessees claim. Thus ultimately, as the machineries had been put in use by the sub contractors, who were given the job of execution the claim for exemption cannot be denied. The use of the phrase supplied to the projects financed by the said United Nations or an International Organisation and approved by the Government of India clearly shows that the condition for grant of exemption is supply of the goods towards the project and nothing beyond. The extract of the Notification No. 108/95-CE dated 28.08.1995 reads as follows:-
In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise and Salt Act, 1944, ( 1 of 1944) read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of special importance) Act, 1957 (58 of 1957), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all goods falling under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the said goods) when supplied to the United Nations or an international organisation for their official use or supplied to the projects financed by the said United Nations or an International organisation and approved by the Government of India, from the whole of-
(iii) The duty of excise leviable thereon under section 3 of the Central Excises and Salt Act, 1944 (1 of 1944); and
(iv) The additional duty of excise leviable thereon under sub-section (1) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957):
Thus with all the conditions satisfied, the beneficial Notification applies to the case on hand. In the circumstances, we do not find any justification to introduce any condition or read in a restrictive manner. Consequently, the Revenues appeal fails and hence, the same is dismissed. No costs.
5. We find that the issue involved in hand is the identical case of the M/s JCB India Limited (Supra), therefore, we find that the appellant is entitled for benefit of exemption Notification No. 108/95 ibid.
6. Considering that the issue has already been decided by this Tribunal, therefore, following the precedent decision of this Tribunal in the appellants own case, we hold that the appellant is entitled for the benefit of exemption Notification No.108/95-CE dated 28.8.1995. In that circumstance, we set aside the impugned order and allow the appeal with consequential relief, if any.
(dictated and pronounced in the court) (DEVENDER SINGH) (ASHOK JINDAL) MEMBER (TECHNICAL) MEMBER (JUDICIAL) mk 1