Custom, Excise & Service Tax Tribunal
M/S. Jai Forgings & Stampings Pvt. Ltd vs Cce, Panchkula on 29 September, 2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No. 2, R.K. Puram, New Delhi COURT No. II CENTRAL EXCISE APPEAL NO. 5755-5756/04 (Arising out of Order-in-Appeal No.408-410/AKG/RTK/2004 dated 1.11.2004 passed by the Commissioner (Appeals), Central Excise, Delhi-III, Gurgaon) M/s. Jai Forgings & Stampings Pvt. Ltd., Appellants Reptd. by Shri R. Santhanam, Advocate Versus CCE, Panchkula Respondent
Rept. By Shri Sunil Kumar, SDR Date of Hearing/decision: 29th September, 2010 Coram: Honble Shri D.N. Panda, Judicial Member;
Honble Shri Rakesh Kumar, Technical Member
FINAL ORDER NO. DATED
Per D.N. Panda:
The assessee is in appeal against the order passed by the Commissioner (Appeals) on 1.11.2004. Insofar as appeal No. APPL/CE/PCK/79/2004 dated 12.4.04 and APPL/CE/PCK/188/2004 dated 11.8.04 before him is concerned he dismissed the appeal of the assessee. Revenue is in appeal against the order passed by the Commissioner (Appeals) against appeal No. APPL/CE/PCK/187/2004 dated 11.8.2004 before him. The assessee is aggrieved for denial of exemption in terms of notification No. 62/95-CE dated 16.3.1995 whereas the Revenue is aggrieved for allowing the appeal of the assessee on the ground of limitation.
2. The assessees appeal came before us today Shri Santhanam, learned Counsel appearing for the assessee mentions that the Revenue has come in appeal against limitation point decided in favour of the assessee. There is no record with the learned D.R. today in respect of Revenues appeal. It appears that the matter has come from 2004 before the Tribunal. Revenues appeal not being before us nor any reference to that appeal could be given by any of the parties we decided to dispose off only the assessees appeals registered as E/5755 & 5756/2004-Ex by this common order since there is a common cause for adjudication against the assessee and the matters are already six years old.
3. The assessees claim was that they are manufacturing certain goods which are classifiable under Sub-heading 73.10 which is undisputed by the Revenue. According to the assessee the goods so manufactured having been provided for use by Defence Department is entitled to exemption under Notification No. 62/95-CE dated 16.3.1995. Shri R. Santhanam, learned Counsel submits that there were two Notifications issued on the same day. Those are Notifications No. 62/95-CE and 63/95-CE. Both the notifications convey the same intention of the Government without any conflict with the purpose of notification. According to him, if the goods are supplied to Defence Deparatment, there should not be any hurdle to grant of exemption in terms of notification No. 62/95-CE dated 16.3.95. He supports his argument relying upon following decisions:-
1. Tata Electronic Devpt. Services vs. CCE, Bangalore 1999 (107) ELT 86 (Tri.);
2. Bharat Electronics Ltd. vs. CCE, Guntur 2006 (198) ELT 239 (Tri.-Bang.l);
3. Uday Computer Aided Mfg. (P) Ltd. vs. CCE, Bangalore 1998 (98) ELT 470 (Tri.);
4. Delco Incorporated vs. CCE, Bangalore 2000 (117) ELT 725 (Tri.);
5. Empire Machine Tools vs. K.C. Singh, Addl. Collector of Cus., Bombay 2004 (165) ELT 146 (Bom.);
4. Further contention of Shri Santhanam is that when the authorities agreed by their letter dated 27.8.2001 that goods were rightly classified under Chapter heading 73.10 and declaration were correct, the assessee was given the benefit of notification. Consequent upon such grant, refund was granted to the assessee. Such view was followed by the department not to raise demand. But for the period September, 2002 to February, 2003 and March, 2003 to April, 2003 duty demand of Rs. 7,98,890/- and Rs. 4,80,941/- respectively arose disallowing the benefit. Such a disallowance was in appeal No. APPL/CE/PCK/79/2004 dated 10.3.04 and in APPL/CE/PCK/188/2004 dated 11.8.2004 respectively and that was the issue before the first appellate authority. The first appellate authority concurred with the adjudicating authority without stating any reason when the notification issued on the same day as stated above grants benefit to certain specified supplies and decisions of the Tribunal have allowed benefit in the past. Further, as against the refund even the appellant assessee succeeded before the first appellate authority when the Revenue agitated the matter.
5. Learned D.R. Shri Sunil Kumar submits that the notification has different intention and such intention shall be defeated if benefit is allowed contrary to the notification. He submits that following the Apex Court decision in Eagle Flask Industries Ltd. 2004 (171) ELT 296 (SC) conditions of notification shall be strictly followed to claim exemption and non-observation of the conditions deprives an assessee from the intended benefit.
6. So far as Revenues appeal is concerned there is no record with the learned D.R.
7. Heard both sides and perused the record. There is no dispute by both sides that the goods in question were classifiable under Sub-heading 73.10 and supplied to defence. But the only difference between the parties was that the condition of notification was questionable. Revenue says that the condition in respect of Srl. No. 16 of notification No. 62/95-CE dated 16.3.95 is to be strictly observed in view of cumulative conditions required to be fulfilled. These conditions are to be read together to arrive at the conclusion. For convenience of reading we reproduce item No. 16 of the Notification readingas follows:-
16. The following goods, namely,
(i) All goods falling under Chapter 86
(ii) All goods falling under heading Nos. 28.44, 28.45, 28.51, 32.15, 68.07, 73.07 to 73.11, 73.13 to 73.26, 74.12, 74.14 to 74.18, 76.09 to 76.13, 76.15, 76.16, 83.02, 83.07, 83.08, 83.10, 83.11, 84.01, 84.25, 85.17, 85.30, 85.34, 85.37, 85.38, 85.48, 93.06 and 94.06
(iii) All goods falling under sub-heading Nos. 2801.90, 2804.90, 4410.90, 7101.39, 7101.60, 7101.70, 7101.90, 7302.90, 7312.90, 7419.10, 7419.99, 8309.90 and 8536.90 If, -
(i) manufactured by a factory belonging to the Central Government;
(ii) intended to be made available to any department of the Central Government either directly or under nay arrangement through the Indian Railway Finance Corporation Limited, being a Company incorporated and registered under the Companies Act, 1956 (1 of 1956); and
(iii) the said goods are intended for use by any department of the Central Government.
8. When we looked into the scope of the notification there is no difficulty to understand that this notification was issued under Section 5A of Central Excise Act, 1944, to serve the public interest. The very object of public interest is conveyed through fulfillment of the conditions laid down therein. Reading of the conditions laid down in the notification lead to construe that non of the condition are to be read in isolation of the other. The nature of the condition is that one is dependent on the other for which all the three conditions were required to be fulfilled in toto and cumulatively. Any deviation to such fulfillment will result in denial of the exemption.
9. The conditions of notification clearly say that the goods of the description under Srl. No. 16 falling under any of the classes mentioned in column No. 2 of the notification should be necessarily manufactured by a factory belonging to the Central Government. It further requires that the goods so manufactured are intended to be made available to any department of Central Government either directly or under any arrangement through the Indian Railway Finance Corporation Limited, being a company incorporated and registered under the Companies Act, 1956 and the said goods are intended for use by any department of the Central Government. Combined reading of the three conditions require not only the goods to be manufactured by a factory belonging to Central Government but that must be intended to be made available to any department of the Central Government either directly or under any arrangement through the Indian Railway Finance Corpn. Ltd. Such an interpretation clearly establishes spirit of the notification to serve public interest it seeks to achieve. Therefore, we are in total disagreement with the contention of the assessee claiming relief under this notification for the reason that the manufacture of the impugned goods was not done by a factory belonging to the Central Government. Once the first condition itself is not fulfilled there is no necessity to look into the other two conditions which depend on the above condition. Since all the three conditions are cumulative in nature we may further add that all public interest notifications lay down conditions, restrictions, limitations and stipulations to fulfill public interest. Once there is defeat to such public spirit there should be denial of exemption.
10. We have perused the various decisions relied upon by the learned Counsel. So far as Tribunals decision in the case of Sujan Industries 2007 (220) ELT 161 (Tri. Mum.) is concerned we find that the subject matter in that case was under notification No. 63/95-CE. We are unable to appreciate that notification No. 62/95-CE and 63/95-CE are one and the same. Had that been the same the Government would have never intended a separate notification to be issued under two different numbers. The decision in Deleco Incorporated 2000 (117) ELT 725 (Tribunal) deals with notification No. 305/77-CE in respect of goods supplied by public sector undertaking to the defence department. That not being the case in the present appeal, it is unprofitable to rely upon it. We have perused the decision in Uday Computer Aided Mfg. (P) Ltd. 1998 (98) ELT 470 (Tribunal). That decision was on the matter of locus standi of authority issuing a clarification and that is not the present case. The decision in Bharat Electronics Ltd. 2006 (198) ELT 239 relates to a case of public sector undertaking which had supplied goods in terms of notification No. 63/95-CE. For the reasons stated in the case of Sujan Industries as above we state that the citations are misplaced. We looked into decision in Tata Electronic Devpt. Services 1999 (107) ELT 86 (Tribunal). The matter in that case related to exemption under notification NO. 184/86-CE. That is not paramateria with the facts of the present case. The fact of the present case are different with the facts of that case. Next we looked into the decision in Empire Machine Tools 2004 (165) ELT 146 (Bom.). That decision relates to a question arising out of EXIM Policy OGL relating to defence supply. We are unable to find whether the ratio of that decision shall squarely cover the present case in view of the import being made by a government enterprises for the specific purpose in that case.
11. Having appreciated that the learned Commissioner (Appeals) had properly adjudicated the matter there is no scope to grant any relief to the assessee on merit. Learned Counsel at the end relied upon the provisions of Cenvat credit Rules, 2002. According to him Rule 6(2) recognize defence supply, for which the appellants should not be denied any relief. If the submission of the learned Counsel is accepted, then the purpose of notification shall be defeated. Therefore, we disagree with the his contention. So far as the limitation is concerned what that has been done by the learned Commissioner (Appeals) in his order at page 6 remains uncontroverted. Therefore, that aspect of the order remain untouched. Consequently, both the appeals fail.
(Dictated & pronounced in the Open Court.) (D.N. PANDA) JUDICIAL MEMBER (RAKESH KUMAR) TECHNICAL MEMBER RK 11