2010 (10) TMI 269 - AT - Central Excise

Denial of Tax Exemption Upheld for Non-Compliance with Notification Conditions

The Tribunal upheld the denial of exemption under Notification No. 62/95-C.E. due to non-compliance with the specified conditions, emphasizing the ... Exemption Notification - Defence supply - Goods manufactured use by Defence Department - Notification No. 62/95-C.E., dated 16-3-95 is to be strictly observed in view of cumulative conditions required to be fulfilled - The conditions of notification clearly say that the goods of the description under Sri. No. 16 falling under any of the classes mentioned in column No. 2 of the notification should be necessarily manufactured by a factory belonging to the Central Government - - An interpretation clearly establishes spirit of the notification to serve public interest it seeks to achieve - Therefore, in total disagreement with the contention of the assessee claiming relief under this notification for the reason that the manufacture of the impugned goods was not done by a factory belonging to the Central Government - Once the first condition itself is not fulfilled there is no necessity to look into the other two conditions which depend on the condition - Since all the three conditions are cumulative in nature, benefit of exemption not available to assessee.the learned Commissioner (Appeals) had properly adjudicated the matter there is no scope to grant any relief to the assessee on merit. Learned Counsel at the end relied upon the provisions of Cenvat credit Rules, 2002 - According to him Rule 6(2) recognizes defence supply, for which the appellants should not be denied any relief - If the submission of the learned Counsel is accepted, then the purpose of notification shall be defeated - Therefore, disagree with the his contention - Consequently, the appeals fail. Issues:1. Appeal against denial of exemption under Notification No. 62/95-C.E.2. Appeal by Revenue against allowing the assessee's appeal on the ground of limitation.3. Interpretation of conditions of Notification No. 62/95-C.E. for exemption eligibility.Analysis:1. The assessee appealed against the denial of exemption under Notification No. 62/95-C.E., dated 16-3-1995. The claim was based on supplying goods to the Defence Department, classified under sub-heading 73.10. The assessee argued that the conditions of the notification were met, citing past decisions supporting their stance. The department had initially agreed on the classification and granted a refund. However, later demands were raised, leading to appeals. The first appellate authority upheld the demands, emphasizing strict adherence to notification conditions.2. The Revenue appealed against the allowance of the assessee's appeal on limitation grounds. The Tribunal noted the absence of records for Revenue's appeal and decided to address only the assessee's appeals due to the commonality of issues and the aged nature of the matters. The Revenue contended that strict adherence to notification conditions was crucial, citing a Supreme Court decision emphasizing compliance for claiming exemptions.3. The Tribunal analyzed the conditions of Notification No. 62/95-C.E. to determine exemption eligibility. It highlighted the requirement that goods must be manufactured by a Central Government factory, intended for a Central Government department's use. Emphasizing the cumulative nature of the conditions, the Tribunal concluded that failure to fulfill any condition would lead to exemption denial. Relying on various decisions, the Tribunal rejected the assessee's arguments and upheld the first appellate authority's decision. Additionally, the Tribunal dismissed the relevance of other notifications and rules cited by the assessee, ultimately ruling against the appeals based on merit and limitation.In conclusion, the Tribunal upheld the denial of exemption under Notification No. 62/95-C.E. due to non-compliance with the specified conditions, emphasizing the cumulative nature of requirements for eligibility. The appeals were dismissed, with the Tribunal underscoring the importance of strict adherence to notification conditions for claiming exemptions.