Custom, Excise & Service Tax Tribunal
M/S.K.E.I. Industries Ltd vs Cce, Jaipur on 3 February, 2016
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/Decision:3.2.2016
Excise Appeal No.2276/2007-EX(DB)
(Arising out of Order-in-Appeal No.130(GRM)CE/JPR-I/2007 dated 8.5.2007 passed by the Commissioner (Appeals), Central Excise-I, Jaipur)
M/s.K.E.I. Industries Ltd. .Appellants
Vs.
CCE, Jaipur. Respondent
Appearance:
Rep. by Ms. Neha Meena, Advocate (Proxy) & Shri Bipin Garg, Advocate for the appellant.
Rep. by Shri R.K. Mishra, DR for the respondent. For approval and signature:
Honble Shri S. K. Mohanty, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) 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 Lordships wish to see the fair copy of the Order?4
Whether Order is to be circulated to the Departmental authorities?
Coram: Honble Shri S.K. Mohanty, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Final Order No.50171/2016 dated:03.02.2016 Per B. Ravichandran:
The present appeal is against order dated 8.5.2007 of Commissioner (Appeals), Jaipur. The appellants are engaged in the manufacture of wires and cables liable to central excise duty. They have cleared a quantity of 10.767 kilometer of cable without payment of duty by claiming exemption under notification no.3/2004-CE dated 8.1.2004. The said notification exempts machineries, appliances and components required for setting up of water supply plants. One of the conditions for availing exemption is that a certificate issued by Dy.Commissioner of the District in which the project is located has to be produced. Since the appellants did not produce such certificate, proceedings were initiated against them for recovering Rs.78,598/- towards duty on the said clearances. The Original Authority vide his order dated 17.11.2006 confirmed the demand.
2. On appeal, the Commissioner (Appeals) vide the impugned order upheld the said original order. The present appeal is against this appellate order.
3. Ld. Counsel for the appellant submitted that during May, 2005, they have cleared the impugned goods and they have submitted a copy of certificate issued by the Dy. Commissioner of District to the jurisdictional Central Excise Officer on 27.04.2005 itself. The appellants submitted the original certificate also on 12.04.2006. The goods were cleared on 4.5.2005. The denial of exemption to the appellant is not sustainable and it was submitted that they have followed the prescribed procedure and there is no dispute that the said goods have been used for the specified purposes. Submissions of original certificate later cannot be the ground for denial of otherwise eligible exemption.
4. Further, ld. Counsel for the appellant submitted that the certificate was in the name of M/s.ONDEO NALCO INDIA LIMITED whereas the order for supply has been placed to the appellant by M/s.VATECH WABAG LTD. In this connection, the appellants submitted that M/s. ONDEO NALCO LTD. had placed orders on M/s. VATECH WABAG LTD, who in turn placed the order to the appellant for the said purpose. The position is clear from the invoice issued by the appellants and also from Purchase Order placed by M/s.VATECH WABAG LTD. A certificate issued by M/s. VATECH WABAG Ltd. in this regard will clarify the position. It was also submitted that since the impugned goods were exempted, the appellants have reversed 10.2% of the value of the goods in terms of the Cenvat Credit Rules, 2004.This aspect has not been considered by the Lower Authorities.
5. Ld. AR reiterated the findings of the lower authorities and submitted that the certificate issued by the Dy. Commissioner is not available in original and only a certified true copy has been submitted by the appellants. Further, there should be a clear linkage of the products supplied by the appellant for the intended purposes in terms of the certificate of the District Authorities. In absence of the same, he submitted that the denial of exemption has to be upheld.
6. We have heard both the sides and examined the appeal records.
7. The only point for decision is whether or not the appellants are right in availing exemption under notification no.3/2004-CE in respect of the consignments cleared by them in the present case. We find that even before the clearance of the impugned goods, the appellants vide their letter dated 27.04.2005 intimated the jurisdictional central excise officer regarding purchase order from M/s.VATECH WABAG Ltd. for supply of cables as sub-contractor for the project, which is exempted in terms of the said notification. They have also enclosed a copy of the exemption certificate issued by the District Authority.
8. We have perused a copy of the certificate dated 22.01.2005 issued by the Dy. Commissioner, East Singhbhum, Jamshedpur, Jharkhand. The said certificate indicates that M/s. ONDEO NALCO INDIA LTD. had placed an order on M/s.VATECH WABAG Ltd. for Water Treatment Plant with Tata Steel Works, Jamshedpur. The list of equipments/machineries, as required for that plant, was also attached. Perusal of the invoice dated 4.5.2005, the purchase order dated 16.2.2005 placed by M/s.VATECH WABAG Ltd. and excise duty certificate issued by M/s/ VATECH WABAG Ltd. and other correspondence submitted by the appellants make it clear that the impugned goods have been cleared by the appellant to the specified units. The appellants supplied the items as sub-contractor for the project. We find that exemption available to sub-contractors in similar type of notifications was examined by the Tribunal in the case of Hy-TUF Steels Pvt. Ltd. 2015 (327) ELT 531 (Tribunal-Ahmd). The Tribunal relied on the decision of the Honble Madras High Court in the case of Caterpillar India Pvt. Ltd. 2013 (297) ELT 8 (Madras) and held that when the machineries were ultimately put in use by the sub-contractor, who are given the job, the exemption cannot be denied. It was observed that in the absence of allegation of possible mis-use of the goods, for unintended purposes, the beneficial notification issued in public interest cannot be denied. In the present case, we find that the denial of exemption is only on the ground that the appellants name is not figuring in the certificate issued by the District Authority. We find that on perusal of the records, it is clear that the certificate issued in the name of M/s. ONDEO NALCO INDIA LTD also mentions the purchase order placed on M/s. VATECH WABAG Ltd. , who placed the purchase order on the appellants. These facts were established by the documentary evidences. As such, we find no justification for denial of exemption. As such, we allow the appeal.
[operative portion already pronounced in the open court] ( S.K. Mohanty ) Member (Technical) ( B. Ravichandran ) Member (Technical) Ckp.
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