Custom, Excise & Service Tax Tribunal
(I) M/S. Vem Technologies Pvt. Limited vs The Commissioner Of Customs, Central ... on 28 July, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH AT BANGALORE COURT - I Appeal No: E/1151 & 1152/2010 (Arising out of Order-in-Original No: 28/2009 - CE dated 31.12.2009 passed by the Commissioner of Customs, Central Excise & Service Tax, Hyderabad.) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? (i) M/s. VEM Technologies Pvt. Limited (ii) Mr. G. P. Sarma Appellant Vs. The Commissioner of Customs, Central Excise & Service Tax Hyderabad - IV Commissionerate Hyderabad. Respondent
Appearance S/Shri N. Venkataraman, Sr. Advocate, T. Vinod Kumar & K. Krishnamurthy, Advocates for the appellant. Shri Ganesh Havannur, SDR for the Revenue.
CORAM SHRI S. S. KANG, HONBLE VICE PRESIDENT SHRI M. VEERAIYAN, HONBLE MEMBER (TECHNICAL) Date of Hearing: 28.07.2011 Date of decision: 28.07.2011 FINAL ORDER No._______________________2011 Per Shri S. S. Kang (Oral) Heard both sides. Both appeals are filed against the common adjudication order and therefore, they are taken up together for disposal.
2. In the impugned order, the benefit of Notification No.10/1997-CE dated 1.3.1997 was disallowed in respect of the goods manufactured and cleared to the Defence Research and Development Organisation (DRDO).
3. The contention of the appellant is that the following goods were supplied to DRDO:
(i) On board computers;
(ii) Electro mechanical actuators;
(iii) Pneumatic systems and sub-assemblies;
(iv) Computer software for launch control centres, simulators and software drivers;
(v) PCI based add on cards for testing MIL - 1553 and ARINC - 429 systems;
(vi) Connectors; and
(vii) Digital servo control electronic etc. As per the Notification, the scientific and technical instruments including computers were supplied to DRDO for research purposes and they were exempted from payment of duty on the condition that the certificate to the effect that the goods are used in research only, issued by the officer not below the rank of Deputy Secretary, is produced. In the present case, the necessary certificate is produced and it is not in dispute in the present proceedings. The benefit of Notification was denied on the ground that the goods in question are for use in the testing of missiles and the same gets consumed and the benefit of exemption is not meant for consumable of a weapon or armament. The contention is that the Notification provides exemption to scientific and technical instruments including computers and computer software used for research purpose, therefore, the denial of the benefit of Notification on the above ground is not sustainable.
4. Appellant also submitted that the demand is confirmed by invoking extension period of limitation, as the appellants were clearing the goods under the Notification and filing monthly returns in this regard and therefore, allegation of suppression is not sustainable.
5. Learned DR appearing on behalf of the Revenue relied upon the findings of the Adjudicating Authority specifically in Para 32 of the adjudication order and submitted that the missile cannot be considered as a scientific and technical instrument.
6. For ready reference, the Notification No.10/97-Central Excise dated 1.3.1997 is reproduced below. Exemption to specified goods supplied to specified institutions In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in column (3) of the Table below and falling under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from the whole of the duty of excise leviable thereon which is specified in the said Schedule, when supplied to the institutions specified in the corresponding entry in column (2) of the said Table, subject to the conditions specified in the corresponding entry in column (4) of the said Table.
TABLE S.No. Name of the Institutions Description of the goods Conditions (1) (2) (3) (4)
1. Public funded research institution or a university or an Indian Institute of Technology or Indian Institute of Science, Bangalore or a Regional Engineering College, other than a hospital
(a) Scientific and technical instruments, apparatus, equipment (including computers);
(b) accessories and spare parts of goods specified in (a) above and consumables;
(c) computer software, Compact Disc-Read Only Memory (CD-ROM), recorded magnetic tapes, microfilms, microfiches.
(d) Prototypes
(i) If the institution (a) is a public funded research institution under the administrative control of the Department of Space or Department of Atomic Energy or the Defence Research Development Organisation of the Government of India and produces a certificate to that effect from an officer not below the rank of a Deputy Secretary to the Government of India in the concerned department to the manufacturer at the time of clearance of the specified goods; or
(b) is registered with the Government of India in the Department of Scientific and Industrial Research and the manufacturer produces at the time of clearance, a certificate from the Head of the institution in each case, certifying that the said goods are required for research purposes only.
(ii) The aggregate value of prototypes received by an institution does not exceed fifty thousand rupees.
Explanation. For the purposes of this notification, the expression,
(a) Public funded research institution means a research institution in the case of which not less than fifty per cent of the recurring expenditure is met by the Central Government or the Government of any State or the administration of any Union territory;
(b) University means a university established or incorporated by or under a Central, State or Provincial Act and includes
(i) an institution declared under section 3 of the University Grants Commission Act, 1956 (3 of 1956) to be a deemed university for the purposes of that Act;
(ii) an institution declared by Parliament by law to be an institution of national importance;
(iii) a college maintained by, or affiliated to, a University;
(c) Head means
(i) in relation to an institution, the Director thereof (by whatever name called);
(ii) in relation to a University, the Registrar thereof (by whatever name called);
(iii) in relation to a college, the Principal thereof (by whatever name called);
(d) hospital includes any Institution, Centre, Trust, Society, Association, Laboratory, Clinic or Maternity Home which renders medical, surgical or diagnostic treatment. (Pronounced and dictated in open Court) (S. S. KANG) VICE PRESIDENT (M. VEERAIYAN) MEMBER (TECHNICAL) .rv ??
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