2009 (6) TMI 808 - AT - Central Excise

Tribunal decision grants exemptions under certain notifications, denies under others

The tribunal ruled that the appellants are eligible for exemptions under Notifications No. 10/97-C.E. and 64/95-C.E. but not under Notification No. ... Wires and cables manufactured for various aircrafts, satellite launch vehicles and also for various military machinery like battle tanks - Exemption under N/N. 0/97-C.E., dated 1-3-2001 and N/N. 6/2002-C.E., dated 1-3-2002 serial No. 240 - Held that:- Wires and cables can be said to be covered by Sl. No. 8 of the Notification reproduced above since it covers stores also. The exemption is not limited to only parts or equipments but also systems, sub systems, equipments and stores. Therefore, a view can be taken that wires and cables are nothing but consumable stores which are stored and used from time to time as and when required. Notification No. 64/95 cannot be treated on Par with the other two notifications and therefore clearances under this notification have to be treated separately and when we look at the heading under Sl. No. 8 equipment and stores, clearly wires and cables cannot be considered as systems and sub systems of launch vehicle and systems and sub systems of satellite projects. For clearance under this heading the appellants are required to prove that the item being cleared is a system or sub system of separate launch vehicle or satellite project. There cannot be a general rule in this regard and clearly wires and cables cannot be called as systems and sub systems and therefore are not eligible for the benefit of notification. Each notification is different and therefore the decisions in respect of one notification cannot be applied to another notification and therefore each has to be treated differently. It is quite clear from the discussion above that appellants are eligible for the benefit of the other two notifications and it is also clear that this does not mean that they are eligible for the benefit of Notification No. 6/2002. In view of the self contained nature of the notification, the appellants are to be held ineligible for the benefit of Notification No. 6/2002 only. Appeal allowed in part. Issues Involved:1. Classification of wires and cables.2. Eligibility for exemption under Notification No. 10/97-C.E.3. Eligibility for exemption under Notification No. 6/2002-C.E.4. Eligibility for exemption under Notification No. 64/95-C.E.Detailed Analysis:1. Classification of Wires and Cables:The primary issue revolves around whether the wires and cables manufactured by the appellants, designed for aircrafts, satellite launch vehicles, and military machinery, qualify as parts of these machines for exemption purposes. The Commissioner initially ruled that the appellants were not eligible for the exemptions under the relevant notifications, leading to this appeal.2. Eligibility for Exemption under Notification No. 10/97-C.E.:The appellants argued that their products are exempt under Notification No. 10/97-C.E., which provides exemptions for scientific and technical apparatus, accessories, spare parts, and consumables used by institutions registered with the Government of India. The appellants contended that they had fulfilled all conditions, including obtaining necessary certificates from purchasers and the Directorate General of Civil Aviation. The tribunal considered past decisions where similar items were granted exemptions and concluded that the wires and cables could be classified as consumables, thereby qualifying for the exemption under Notification No. 10/97-C.E.3. Eligibility for Exemption under Notification No. 6/2002-C.E.:Notification No. 6/2002-C.E. exempts parts of aeroplanes and helicopters from duty. The appellants claimed that their wires and cables, accepted by customers like Hindustan Aeronautics Ltd. for use in aircraft, should be exempt. However, the tribunal noted that the notification explicitly lists parts and includes specific exclusions. The tribunal referenced previous rulings, such as Incab Industries Ltd. v. C.C.E., Pune, which determined that wires and cables in running length are not parts of battle tanks and thus not eligible for exemption. Consequently, the tribunal held that the wires and cables did not qualify as parts of aeroplanes or helicopters under Notification No. 6/2002-C.E.4. Eligibility for Exemption under Notification No. 64/95-C.E.:Notification No. 64/95-C.E. provides exemptions for goods used in defense projects, including systems, sub-systems, equipment, and stores. The tribunal found that wires and cables could be considered consumable stores used in defense projects, thus qualifying for exemption under this notification. The tribunal emphasized that each notification has distinct criteria, and the eligibility under one does not automatically imply eligibility under another.Conclusion:The tribunal concluded that the appellants are eligible for exemptions under Notifications No. 10/97-C.E. and 64/95-C.E. but not under Notification No. 6/2002-C.E. This decision was based on the specific terms and conditions of each notification and relevant case law. The appeal was partially allowed, granting exemptions under the first two notifications but denying it under the third. The cross-objections filed by the Revenue were also disposed of accordingly.Separate Judgment:One member of the tribunal, while agreeing with the overall decision, noted that the appellants had claimed benefits under both notifications alternatively. Since the benefit of Notification No. 10/97-C.E. was granted, the appeal was allowed in totality, rendering the discussion on Notification No. 6/2002-C.E. academic. The appeal was thus fully allowed, as the Commissioner had denied both notifications' benefits, leading to the issuance of show cause notices for demand confirmation.