Custom, Excise & Service Tax Tribunal
M/S. Auro Lab vs Cce, Madurai on 25 February, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/640/2004
(Arising out of Order-in-Appeal No. 93/2004-CE dated 27.02.2004 passed by the Commissioner of Central Excise(Appeals), Madurai).
M/s. AURO LAB : Appellant
Vs.
CCE, Madurai : Respondent
Appearance Shri T. Ramesh, Adv., for the Appellant Shri Veerabhadra Reddy, JC(AR), for the Respondent CORAM Honble Shri R. Periasami, Technical Member Honble Shri P. K. Choudhary, Judicial Member Date of Hearing: 17.02.2016 Date of Pronouncement:
FINAL ORDER No. 40319 / 2016 Per P. K. Choudhary M/s Aurolab, Madurai, hereinafter referred to as the Appellant had filed a refund claim dated 13.05.2003 for a sum of Rs.5,46,952/- with the Assistant Commissioner of Central Excise, Madurai. The appellant had cleared sutures to M/s RITES LIMITED, New Delhi, under Invoice Nos. 488, 491, 492 and 493 of 2002 all dated 11.05.2002 and 699 of 2002 dated 30.05.2002 on payment of duty of the above sum for the Cataract Blindness Control Project, financed by the World Bank.
2. An exemption under Notification No. 108/95 dated 28.08.1995 is available on the goods supplied to the United Nations or an International Organization for their official use or supply to the project financed by the said United Nations or an International Organization and approved by the Government of India, from the whole of the duty provided that before the clearance of the said goods, the Manufacturer produces before the Assistant Commissioner of Central Excise having jurisdiction over his factory, in case the said goods are intended to be supplied to a project financed by the World bank and if the said project has been approved by the Government of India, a certificate from the Executive Head of the Project Implementing Authority and countersigned by an Officer not below the rank of a Joint Secretary to the Government of India that the goods are required for execution of the said project and that the said project has duly been approved by the Government of India.
3. On verification of the refund claims filed by the appellant, the following discrepancies were noted.
(i) Though the assesses cleared the said goods one year back ie., during May 2002, they neither informed the department of availing exemption under the notification nor produced the certificate before clearance of the said goods before the jurisdictional Assistant Commissioner.
(ii) As required under the notification, a certificate issued by the head of the Project implementing Authority and countersigned by an officer not below the rank of Joint Secretary to the Government of India has to be produced. But the certificate produced by them has not been countersigned.
(iii) They have not furnished the documents that the incidence of duty has been borne by them.
The Adjudicating Authority had, after considering the submissions made by the appellant, vide Order No. 27/2003 (Refund) dated 10.08.2003, rejected the refund claim since it was felt that the appellant was not entitled for the duty exemption under Notification No. 108/95 as the condition laid down in the said notification was not fulfilled.
4. Being aggrieved with the said order No. 27/2003 (Refund) dated 10.08.2003, passed by the Assistant Commissioner, an appeal was filed before the Ld. Commissioner (Appeals), Madurai. The Learned Commissioner (Appeals) vide his Order in Appeal No. 93/2004 dated 27.02.2004 rejected the appeal filed by the appellant, on two counts i.e. non-production of the certificate before the clearance of the said goods and the certificate was not countersigned by an Officer not below the rank of a Joint Secretary to the Government of India.
5. The Learned Commissioner (Appeals) has further held that the production of a proper certificate before the clearance of goods is the condition precedent to avail of the exemption under Notification No.108 / 95 CE dated 28.08.1995, as amended. Being aggrieved with the aforesaid Order in Appeal No.93/2004 dated 27.02.2004, the present appeal has been filed.
6. The appellant assessee is represented by Shri T. Ramesh, Advocate, who submitted that the appellant are entitled for the benefit of the exemption of the said notification; that at the time of participating in the bid, the central excise duty was not payable on such sutures and however, w.e.f 1.3.2002, the central excise duty was levied on sutures and therefore, the appellant has cleared the goods on payment of central excise duty; that under the Exim Policy, the supplies made by the appellant are considered as deemed export and the appellant are entitled for the refund of terminal excise duty paid on the goods supplied to the project financed by the World Bank; that the appellant are in possession of the certificate issued by the Project Implementing Authority, Government of India, Ministry of Health and Family Welfare (Department of Health) to the effect that the sutures are required for the project funded by the World Bank which was approved by the Ministry of Economic Affairs, Government of India. The said certificate was issued by the Under Secretary, Ministry of Health and Family Welfare, New Delhi. The contents of their grounds of appeal were also reiterated. The appellant relied upon the judgment of this Honble Tribunal in the case of Engineering Innovations Ltd Vs. C Cus, Kandla 2009(242) ELT 153.
7. The revenue was represented by Shri Veerabhadra Reddy, JC(AR). The learned AR reiterated the contents in the OIO & OIA and relied on the judgment of the Honble Supreme Court in the case of CCE, New Delhi Vs. Hari Chand Shri Gopal - 2010 (260) ELT 3 ( S.C.), and Eagle Flask Industries Ltd Vs. CCE, Pune - 2004 (171) ELT 296 (S.C.); the Andhra Pradesh High Courts judgment in the case of Sterlite Industries (India) Ltd, Vs. Transmission Corpn. Of Andhra Pradesh Ltd,- 2005 (189) ELT 266 (A.P.) and prayed for rejection of the appeal.
8. Heard both sides and on perusal of records, we find that the Ophthalmology Section of Ministry of Health and Family Welfare, Government of India had awarded the contract to the appellant assessee as per the terms and conditions of the bid document for the items i.e. sutures. Before proceeding to address the core issue, we bear in mind that the clearance of the goods was for Cataract Blindness Control Project financed by the World Bank. It is true that the benefit of notification becomes eligible only in the event of fulfillment of the conditions stipulated therein. In the instant case, the Commissioner (Appeals) has denied the benefit of this notification on two counts viz non-production of certificate before the clearance of the said goods, and the certificate was not countersigned by an Officer not below the rank of a Joint Secretary to the Govt. of India. With regard to the first snag of non-production of the certificate before clearance of the said goods, it is to be noted that the observation of the Ld. Commissioner (Appeals) in his order regarding the finding of the adjudicating authority in the order in original, (quote): The lower authority in the impugned order has observed that the appellants have not fulfilled the above conditions stipulated in the said notification. (Unquote), is factually erroneous as we find that there is no such finding.
9. It has not been disputed by the lower authority that the goods cleared were not for the intended project or that there was diversion of the goods by illegally claiming the benefit of the said notification. The purpose of the beneficial notification is for the successful implementation of various welfare measures which are intended to be carried out bearing in mind the laudable spirit which in this case is that the project was for controlling the cataract blindness
10. Taking cognizance of the sore fact that the victims of cataract blindness in this country is registering staggering height, year after year. As vision in the eyes is of paramount importance, than any other limbs to the human beings, bestowing sufficient concentration on this vital aspect should receive the utmost attention of the authorities by being liberal in passing benefits of such notifications. Any attempt to deny such benefits on technical grounds would contribute to the alarming growth in loss of vision, which no progressive society can afford. Keeping this in mind, the solitary ground that led to the denial of the benefit under the said notification was that the certificate was not countersigned by an Officer of stipulated rank viz., not below the rank of a Joint Secretary to the Govt. of India. In the instant case, the said certificate had been signed by the Under Secretary to the Govt. of India. There is understandably difference between an unsigned certificate and a certificate which was signed but not countersigned. Taking into the account the well settled principle that procedural infirmities such as the present one should not be allowed to the extent of denying the very benefit offered by the above said notification which is beneficial in nature, and only granting, rather than non-granting, will be in consonance with the legislative intent.
11. The case laws relied by the AR are inapplicable here as the goods in the case of Hari Chand Shri Gopal were cleared under an exemption by not following the procedures laid down in Chapter X. In the instant case, the clearance of the goods is not in doubt and the project is one funded by the World Bank intended for a noble cause. In the case of Eagle Flask Industries, there was a condition of filing a declaration / an undertaking which was so basic and not complied with. In the instant case, there has been substantial compliance with the notification barring the absence of countersignature by an Officer not below the rank of a Joint Secretary. With regard to the third case law viz. M/s Sterlite Industries, which was a case wherein the exemption was under Notification No.108/95 but the reason for which the exemption was denied, was failure to establish that the condition precedent was satisfied and the said condition being a certificate issued in terms of para (c) (ii) by the implementing authority can be of no avail as the said authority was indeed empowered to issue a certificate, if the project is financed by an International Organization. This case also does not support the revenue as in the instant case there has been a certificate with the only infirmity being non-countersigned.
12. In view of the foregoing discussions, we are of the considered view that the appellants are eligible for exemption Notification No. 108/95 dated 28.08.1995 on sutures cleared to the Government under the project funded by the World Bank. Accordingly, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law.
(Pronounced in open court on )
(P.K. CHOUDHARY) (R. PERIASAMI)
Judicial Member Tehnical Member
BB
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