2015 (4) TMI 955 - AT - Central Excise

EOU entitled to duty-free goods exemption benefit for processing granites from state-owned quarries.

The Tribunal held that the EOU appellant, despite not owning or leasing the quarry, was entitled to the exemption benefit under Notification No. ... Benefit of Notification No. 37/2000-CE dated 8.5.2000 - 100% EOU - Held that:- It appears from record that the owner of the quarry is the Government of Tamilnadu. The appellant was user of the same in accordance with agreement referred to above. Perusal of Rule 8A of Tamilnadu Minor Mineral Concession Rules, 1959 shows that grant of quarry lease is the domain of the State Government. In accordance with such Rule, the State has equal power to permit use thereof under any other arrangement for raising the output from the quarry. Since the quarry belongs to the State and appellant was user thereof, the goods procured without payment of excise duty used in quarrying granite and processing thereof for export is not disentitled to exemption benefit under the notification. Not owing lease has not debarred the appellant to quarry granite and process the same. If the condition of processing of procured granite from the quarry of the State under an agreement is fulfilled by the 100% EOU appellant, benefit of the notification is undeniable since any denial thereof would defeat the object thereof. - Decided in favour of assessee. Issues:1. Whether the EOU appellant is entitled to exemption benefit under Notification No. 37/2000-CE for goods procured duty-free and used for raising granites from quarries owned by the State of Tamilnadu.Analysis:1. The appellant argued that they used the quarries owned by the State of Tamilnadu and Tamilnadu Minerals Ltd. permitted them to raise and process granite for export under Rule 8A of the Tamilnadu Minor Mineral Concession Rules, 1959 and an agreement dated 7.1.2002. They contended that by fulfilling the conditions, they are eligible for the exemption under Notification No. 37/2000-CE dated 8.5.2000. The appellant's position was that since they were users of the quarry owned by the State, they should be allowed the benefit of the notification.2. The Revenue, on the other hand, argued that the appellant did not own or lease the quarry, and therefore, they should not be entitled to the exemption under the notification. They contended that not meeting the ownership or lease requirement should disentitle the appellant from claiming the benefit.3. Upon hearing both sides and examining the relevant documents, the Tribunal noted that the quarry was owned by the Government of Tamilnadu, and the appellant was a user of the quarry as per the agreement mentioned. The Tribunal observed that as per Rule 8A of the Tamilnadu Minor Mineral Concession Rules, 1959, the State Government had the authority to permit the use of the quarry for raising output. Since the appellant was a user of the quarry owned by the State, they were not debarred from procuring goods duty-free and using them in quarrying granite for export.4. The Tribunal concluded that the appellant, despite not owning or leasing the quarry, was eligible for the exemption benefit under the notification as long as they fulfilled the conditions of processing the procured granite from the State's quarry under the agreement. Denying the benefit would defeat the purpose of the notification. Therefore, the Tribunal allowed both appeals and disposed of the stay applications in favor of the appellant.5. In summary, the Tribunal held that the EOU appellant, even without owning or leasing the quarry, was entitled to the exemption benefit under Notification No. 37/2000-CE for using duty-free goods in raising granites from quarries owned by the State of Tamilnadu, as long as they complied with the processing conditions outlined in the agreement.