Custom, Excise & Service Tax Tribunal
Shri Satish Kumar, ... vs Cce, Jaipur-I on 27 September, 2016
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing:16.09.2016 Date of Decision:27.09.2016
Excise Appeals Nos.1180 and 1727/2010-EX(DB)
(Arising out of common Order-in-Original No.01/2010(C.E.) dated 19.01.2010 passed by the Commissioner, Customs & Central Excise, Jaipur-I)
Shri Satish Kumar, Director(Electrical) Appellants
M/s. Azad Coach Pvt. Ltd.
Vs.
CCE, Jaipur-I Respondent
Appearance:
Rep. by Shri P.K. Satia and Shri Alok Kathori, Advocates for the appellant. Rep. by Shri Yogesh Agarwal, DR for the respondent. Coram: Honble Mr. Justice (Dr.) Satish Chandra, President Honble Mr. B. Ravichandran, Member (Technical) Final Order Nos.53826-53827/2016 Per B. Ravichandran:
These two appeals are against the order dated 29.01.2010 of Commissioner of Central Excise, Jaipur-I. The main appellant is engaged in the manufacture of bus bodies. They have claimed exemption under Notification no.6/2006-CE dated 1.3.2006 (Sl.No.19) in respect of buses cleared to M/s. Delhi Metro Railway Corporation (DMRC). The Revenue raised an objection to the claim of exemption and the proceedings were initiated against them to deny the exemption and to recover the duty. The impugned order held that the appellants are not eligible for exemption claimed and central excise duty of Rs.1,60,09,717/- was confirmed against them. Penalty equal to the said duty was imposed on the main appellant and a penalty of Rs.50,000/- was imposed on the second appellant, who is the Director of the DMRC, Delhi.
2. Ld. Counsel for the appellant submitted that Sl.No.19 of the Notification No.6/2006-CE provides for full exemption from excise duty for all items of equipment including machinery and rolling stock procured by or on behalf of DMRC for use in their various projects. The condition to be fulfilled is that a certificate from the Chairman/Managing Director or Director of DMRC has to be produced regarding the said entitlement. In the present case, the dispute revolves around the eligibility of the buses supplied by the main appellant to DMRC, for the above said exemption. Ld. Counel submitted that the buses supplied should fall in the broad category of equipment and as such are eligible for exemption. He placed reliance on the various dictionary meaning of equipment including Law Lexicon and Blacks Law Dictionary.
3. Ld. AR submitted that the buses cleared by the main appellant can never be considered as an equipment. The entry in the notification is very clear that the exemption shall be applicable only to the all items of equipment including machinery and rolling stock. He submitted that the buses for transport of the persons can never be considered as equipment The definition relied on by the appellant are with reference to Workmen Compensation and in other related provisions, which cannot be applied to the Central Excise Provisions. The common understanding of equipment has to be followed.
4. We have heard both the sides and examined the appeal records.
5. The admitted facts of the case are that the main appellant supplied buses to DMRC. The wordings of Entry No.90 in the Notification is specific and the appellants claim that bus is an equipment cannot be accepted even by plain reading. The Original Authority also relied on the Boards letter dated 14.09.2004 addressed to the DMRC enclosing two lists of items, for which exemption was sought by the DMRC. The Original Authority referred to the proceedings of the Empowered Committed on Delhi MRTS Project. The Original Authority, after examining in detail, the background of DMRCs claim with the Department of Revenue recorded that bus cannot be even by implication considered as equipment It was also recorded that if the intention is to include the bus for exemption, the same could have found place in the original list of items submitted by the DMRC for consideration before the issue of the exemption notification. The buses procured by DMRC are for Metro Link Bus Service, for which buses will be handed over to the private operators on operate and transfer basis, on recovery of the value of the buses. This shows that neither the buses are used by DMRC nor ultimately owned by them. The Original Authority recorded that it is an admitted fact that the exemption under notification was extended to DMRC on their request after deliberation in the Empowered Committee on Delhi MRTS Project and after jointly examined by the Department of Revenue as well as by the Ministry of Urban Development and DMRC. This is in the light of the decision taken by the Group of Ministers (GOM).
6. After careful examination of the findings recorded by the Original Authority and on various meanings based on the dictionary as pleaded by the appellant, we find that buses for passengers cannot be considered as an equipment within the scope of Entry No.90 of the above said notification. The appellants claim for such exemption is not tenable.
7. However, we find that the penalties imposed on the main appellant as well as the Director of the DMRC cannot be sustained. We find no justification for imposing equal amount of penalty on the main appellant in terms of Section 11 AC. The main appellant produced a certificate given by DMRC and claimed the exemption. DMRC gave such certificate based on their understanding of the claim for exemption. No fraudulent intent could be brought out in these transactions. DMRC is a Government Promoted Utility Organization and considering the facts and circumstances of the case, we find no justification in the imposition of equal penalty on the appellant and personal penalty on the Director of DMRC. Accordingly, we set aside the penalties imposed on them.
8. In view of the above findings, the appeal by the main appellant is partly rejected with reference to the claim of exemption and partly allowed with reference to penalty. The appeal by the Director, DMRC is allowed.
[Order pronounced on 27.09.2016.] (Justice Dr. Satish Chandra) President ( B. Ravichandran ) Member (Technical) Ckp.
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