Custom, Excise & Service Tax Tribunal
Rajendra Mechnanical Industries Ltd vs Commissioner Of Central Excise, ... on 31 March, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No.E/243/08 E/CO/50/08 (Arising out of Order-in-Original No.8/PD/Th-II/2007 dated 26/11/2007 dated passed by Commissioner of Central Excise, Thane) For approval and signature: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.R. Chandrasekharan, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No 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 : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Rajendra Mechnanical Industries Ltd., Appellant Vs. Commissioner of Central Excise, Thane-II Respondent Appearance:
Shri.D.B. Shroff, Advocat for appellant Shri.V.K. Singh, SDR, for respondent CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.R.Chandrasekharan, Member (Technical) Date of Hearing : 31/03/2011 Date of Decision : 31/03/2011 ORDER NO Per: Ashok Jindal
1. This appeal is directed against the impugned order wherein a demand of duty of Rs.1,03,61,856/- was confirmed and a penalty of equivalent amount.
2. The brief facts of the case are that the demand of duty has arisen on the ground that the appellants have cleared their finished goods i.e. stainless steel pipes and tubes by availing notification No.10/97-CE dated 01/03/97. As they were not eligible for the exemption, it was found by the adjudicating authority that the goods supplied by the appellants to BARC, ISRO, etc. were used by BARC and ISRO after doing some cutting, bending, etc. It was also observed that the benefit of exemption notification is available only when the assessee satisfied all the conditions of the notification. As in this case the description of use has not been stated in the certificate issued by the competent authority of BARC/ISRO, therefore, the benefit of exemption notification was denied and the demands were confirmed along with penalties. Aggrieved by the said order, the appellants are before us.
3. Shri D.B. Shroff, the Ld. Sr. Advocate for the appellants appeared and submitted that the tender documents were floated by the Government agencies and the purchase orders were issued to the appellants after finally confirmed by the Government agencies. The appellant supplied the goods as required under the purchase orders before the removal of the goods the appellants received certificate issued by the competent authority as per the notification No.10/97. He further submitted that the appellants quoted their price separately for charging of excise duty, which was negotiated by BARC/ISRO as they are exempt under notification No.10/97 and, therefore, they have issued certificate to that effect also. He further submitted that as per notification No.10/97, the only conditions stipulated that the goods are to be purchased by public funded research institution under the administrative control of the Department of Space or Department of Atomic Energy or the Defence Research Development organization of the Government of India and produces a certificate to that effect from an officer not below the rank of Deputy Secretary to the Government of India in the concerned department to the manufacturer at the time of clearances 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. He drew our attention to some of the certificates which were issued by the competent authority of the institution as per notification and certifying that such goods are required for the research purposes only. He further submitted that the particular use of the goods is not required as per the certificate and the denial of exemption by the adjudicating authority is not sustainable, therefore, he sought the impugned order to be set aside. In alternate he submitted that during the adjudication proceedings, the appellants could not produce the end use certificate from BARC/ISRO but now they have received the certificate certifying that the said pipes are used as parts/accessories to the above scientific and technical instruments/apparatus. Therefore, the demands confirmed by the impugned order are not sustainable.
4. On the other hand the Ld. DR submitted that as per exemption notification No.10/97 the goods, which are described at Sl.No.3 of the table are only eligible for exemption; as admitted by the appellants that these description was not given in the said certificate, therefore, the adjudicating authority has rightly denied the exemption. He further submitted that there are some demands also on account of pipes cleared in excess of the value mentioned in the exemption certificate and there are certain demands of the goods for which the appellants could not produce exemption certificates, hence, the impugned order is to be upheld.
5. Heard both sides.
6. After hearing both sides at length, we find that the issue involved in this case is whether the appellants are entitled for the benefit of exemption notification No.10/97 or not. For better appreciation, we have to go through the notification, which is relevant, the part of the said notification extracted as 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. 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.
7. On going through the notification, we observed that the benefit of said notification is available for the clearances made to a specific institution and for specific goods after issuing a certificate by a competent authority certifying that the said goods are required for research purposes only. It is an admitted fact that the certificates does not show that under which category of the impugned goods falls whether they are scientific and technical instruments, apparatus, equipments or accessories and spare parts of the goods specified herein above or consumable. Therefore, the adjudicating authority has rightly denied the exemption to the appellants. As submitted by the Ld. Advocate that the appellants have been able to obtain a certificate from BARC/ISRO with regard to end use of the goods supplied by them and the same were not produced before the adjudicating authority during the adjudication proceedings. Therefore, we find that these certificates need examination at the end of the adjudicating authority. Therefore, in the interest of justice, we are of the opinion, the matter should be remanded.
8. After considering the submissions and discussions herein above, we set aside the impugned order and remand back the case to the adjudicating authority to look into the certificates issued by BARC/ISRO, etc. with regard to the end use of the impugned goods supplied by the appellants to them and to consider the contention of the appellants with regard to the annexure C and D of the show-cause notice, after giving reasonable opportunity to the appellants to present their case in accordance with the law. Therefore, the impugned order is set aside, the appeal is allowed by way of remand. Cross objections are also disposed of in the above manner.
(Pronounced in Court) (P.R. Chandrasekharan) Member (Technical) (Ashok Jindal) Member (Judicial) pj 1 2