2015 (1) TMI 494 - AT - Central Excise

Tribunal Waives Pre-deposit for Central Excise Duties

The Tribunal granted the Applicant's request for waiver of pre-deposit of Central Excise duty, interest, and penalty under Section 11AC of the Central ... Waiver of pre-deposit - Exemption under Notification No.108/95-CE - Requirement of certificate proving project approval by Government of India - Prima facie case test for grant of stay - Stay of recovery during pendency of appealExemption under Notification No.108/95-CE - Requirement of certificate proving project approval by Government of India - Waiver of pre-deposit - Prima facie case test for grant of stay - Stay of recovery during pendency of appeal - Whether the appellant is entitled to waiver of pre-deposit and stay of recovery pending appeal by demonstrating prima facie entitlement to exemption under Notification No.108/95-CE. - HELD THAT: - The Tribunal examined Notification No.108/95-CE which exempts goods supplied for use in a project that has been approved by the Government of India and financed by an international organisation, provided a certificate is produced by the relevant authority confirming that the goods are required for execution of the project and that the project has been approved by the Government of India. The appellant produced a certificate from the Secretary, Finance Department, Government of Tamil Nadu, showing the supplies were made for a project executed under World Bank assistance (Loan No. LN 4798-IN) and the appellant's name appears on that certificate. The Tribunal accepted the submission that a World Bank loan sanction is contingent on approval of the project by the Government of India and held that, on the materials produced, the essential ingredients of the Notification were prima facie satisfied. Applying the prima facie test for grant of interim relief, the Tribunal found that the appellant had made out a case for waiver of the pre-deposit and for staying recovery during the pendency of the appeal, and accordingly exercised its discretion in favour of the appellant.Requirement of pre-deposit waived and recovery stayed during pendency of the appeal.Final Conclusion: On a prima facie view of the certificate showing supplies to a World Bank assisted project and the attendant finding that the Notification's conditions appear satisfied, the Tribunal allowed full waiver of the pre deposit and stayed recovery pending the appeal. Issues:Waiver of pre-deposit of Central Excise duty, interest, and penalty under Section 11AC of the Central Excise Act, 1944.Analysis:Issue 1: Waiver of pre-deposit of Central Excise duty, interest, and penaltyThe Application sought waiver of pre-deposit of Central Excise duty amounting to Rs. 1,39,786, along with unspecified interest and penalty under Section 11AC of the Central Excise Act, 1944. The Applicant contended that the goods supplied to Tamil Nadu Water Supply and Drainage Board for a project under World Bank assistance fulfilled the conditions of Notification No.108/95-CE dated 28.08.1995, exempting goods supplied to projects approved by the Government of India and financed by international organizations. The Ld. Consultant argued that the loan approval by the World Bank necessitated Govt. of India's project approval, fulfilling all conditions. The Ld. A.R. for Revenue, however, maintained that the certificate did not clearly indicate Govt. of India's approval for the project, thus denying the exemption. After considering both arguments, the Tribunal found that the Applicant had met the conditions of the Notification, as the goods were supplied for an approved project under World Bank assistance, with the project's approval by the Govt. of India. Notably, the certificate from the Govt. of Tamil Nadu indicated the Applicant's involvement in the project, leading the Tribunal to grant a full waiver of the pre-deposit, staying the recovery during the Appeal's pendency.In conclusion, the Tribunal granted the Applicant's request for waiver of pre-deposit of Central Excise duty, interest, and penalty under Section 11AC of the Central Excise Act, 1944, based on the fulfillment of conditions outlined in Notification No.108/95-CE dated 28.08.1995 for goods supplied to an approved project financed by an international organization, with Govt. of India's approval.---