2008 (6) TMI 459 - AT - Central Excise

Vitrified ceramic tiles ineligible for tax exemption as consumables for research

The Tribunal held that unglazed vitrified ceramic tiles were not eligible for exemption as consumables under Notification No. 10/97 for research purposes. ... Tiles - Unglazed vitrified ceramic tiles - N/N. 10/97 - Held that: - N/N. 10/97 grants exemption in respect of specified goods used for research purposes. The goods specified are scientific and technical instruments, apparatus accessories and spare parts of these goods and consumables. The word consumables should therefore be one which are required for these instruments and appliances etc. Vitrified tiles can no-way be considered as consumable required for research purposes. Merely because the Registrar of I.I.T. has claimed it as consumable does not mean that the item has to be considered as consumable as Registrar has no such expertise to give a certificate like that - appeal allowed. Issues:Exemption under Notification No. 10/97 for unglazed vitrified ceramic tiles meant for research purposes.Analysis:The appeal involved a dispute regarding the exemption claimed by I.I.T. Madras under Notification No. 10/97 for 199 boxes of unglazed vitrified ceramic tiles meant for research purposes. The exemption under the notification was applicable to specified institutions, including public funded research institutions registered with the Government of India. The dispute arose when the Revenue contended that the tiles were not consumables and hence not eligible for exemption. The Deputy Commissioner, in the adjudication, denied the exemption and imposed a demand along with penalties. However, the Commissioner (Appeals) allowed the appeal, stating that the goods should be considered consumables as per the certification provided by the proper officer at I.I.T. Madras.The Revenue challenged the Commissioner (Appeals) order, arguing that vitrified tiles could not be classified as consumables for research purposes as they were intended for civil construction, specifically for flooring. The Revenue emphasized that the Registrar of I.I.T. was not authorized to issue the certificate regarding the nature of the goods. Reference was made to a Supreme Court decision highlighting the importance of actual use in granting exemptions, rather than mere certification. On the other hand, the respondents contended that the Registrar of I.I.T. was competent to issue the certificate, given I.I.T.'s status as a deemed University.The Tribunal analyzed the submissions and noted the absence of the certificate issued by the Registrar classifying the ceramic tiles. Without the certificate, the Tribunal relied on the facts on record to decide the issue. It was observed that the exemption under Notification No. 10/97 applied to consumables required for research purposes, such as scientific instruments and apparatus. Vitrified tiles were deemed unsuitable as consumables for research purposes, irrespective of the Registrar's certification. Therefore, the Tribunal upheld the Revenue's appeal, setting aside the Commissioner (Appeals) order.In conclusion, the Tribunal's decision clarified that vitrified ceramic tiles were not eligible for exemption as consumables under Notification No. 10/97 meant for research purposes, emphasizing the specific nature of goods qualifying for such exemptions.