2015 (8) TMI 294 - HC - Central Excise

Bombay High Court upholds Tribunal decision on excise duty exemption for goods with valid end-use certificates

The High Court of Bombay reviewed an appeal challenging the Customs, Excise and Service Tax Appellate Tribunal's order on the interpretation of an ... End use based exemption - Notification No. 10/97-C.E. - Whether impugned goods are spare parts or accessories of the scientific and technical instruments/apparatus - end use certificate - Duty demand - Imposition of interest and equivalent penalty - Held that:- After reproducing the notification in the impugned order [2014 (3) TMI 274 - CESTAT MUMBAI], the Tribunal construed it and held that the end use certificates certify that the impugned goods are used as parts/accessories, scientific and technical instruments /apparatus. The Bhabha Atomic Research Centre (BARC) certificate dated 7th May, 2008 is relied upon and that certifies that the pipes/tubes are used as parts /accessories and for setting up of the Pickling and Passivation Plant and installation of Ventury Scrubber System. If such is the nature of the certificate and the wording thereof being clear and unambiguous the Tribunal rightly allowed the appeal of the assessee and reversed the order of the Commissioner. The Commissioner has not performed the task assigned to it by the Tribunal. His duty was to scrutinize and verify the certificates in the light of the terms of the notification beyond that if the end use was insisted even that end use has been certified and as pointed out in the Tribunal’s order. - appeal does not raise any substantial question of law. - Decided against Revenue. Issues: Interpretation of exemption notification regarding duty of excise leviable on goods supplied to specified institutions.Analysis:The High Court of Bombay heard an appeal challenging the order passed by the Customs, Excise and Service Tax Appellate Tribunal. The appeal raised a substantial question of law regarding the interpretation of Notification No. 10/97-C.E., dated 1st March, 1997, which exempts certain goods from excise duty when supplied to specified institutions under certain conditions. The appellant argued that the Tribunal should have remanded the matter for scrutiny when certificates from the institution were furnished during the hearing. The appellant emphasized the need for strict construction of the exemption notification and highlighted the importance of end-use certificates. On the other hand, the respondent contended that the appeal did not raise any substantial question of law as the certificates related to end-use were obtained and found to be in compliance with the notification. The Tribunal's focus was on the correctness of the Commissioner's order and the verification of certificates provided by the assessee.The High Court reviewed the notification and the Tribunal's order, noting that the remand was limited to verifying the certificates produced by the assessee. The Tribunal correctly interpreted the notification and concluded that the goods supplied were used as parts/accessories based on the end-use certificates from the institution. Specifically, the Bhabha Atomic Research Centre certificate confirmed the usage of pipes/tubes for specific purposes. The Tribunal found that the Commissioner failed to fulfill the task of scrutinizing and verifying the certificates in accordance with the notification's terms. Therefore, the Tribunal rightfully allowed the appeal and overturned the Commissioner's order.In conclusion, the High Court held that the appeal did not raise any substantial question of law. The Tribunal's decision was not considered perverse or tainted by any legal errors apparent on the record. The Court found no merit in the appeal and dismissed it without costs.