Tribunal broadens definition of "Stores" for Navy & Coast Guard supplies, granting benefit under Notification No. 64/95-C.E.

The Tribunal allowed the appeal, setting aside the denial of benefit under Notification No. 64/95-C.E. for goods supplied as Stores for consumption on board a vessel of the Indian Navy or Coast Guard. The Tribunal emphasized a broad interpretation of the term "Stores" to include goods used for the vessel's operation, not limited to consumables for humans. Citing relevant precedents and legal definitions, the Tribunal concluded that the appellant was entitled to the benefit, as clarified by existing legal interpretations and definitions.

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Issues:
Availability of benefit of Notification No. 64/95-C.E. for goods supplied as Stores for consumption on board a vessel of the Indian Navy or Coast Guard.

Analysis:
The issue in the present appeal pertains to the availability of benefit under Notification No. 64/95-C.E., which exempts goods supplied as Stores for consumption on board a vessel of the Indian Navy or Coast Guard upon production of a certificate from the proper officer of the Indian Navy. The appellant produced the required certificate, but the benefit was denied on the grounds that the plates and sheets cleared by the appellant could not be considered as "Stores" as they were used for repairs of warships and were deemed raw material, not covered by the term "Stores".

The Tribunal referred to previous decisions, notably the case of Goa Paints & Allied Products v. CCE, Goa, affirmed by the Hon'ble Apex Court, and the case of Indian Telephone Industries Ltd. v. Collector of C. Ex., Cochin. The Tribunal emphasized that a restrictive meaning should not be given to the term "Stores" and "Consumption." It highlighted that the term "Stores" should encompass goods of a particular kind or purpose, including equipment, and not limited to items consumed by humans. The definition of "consumption" was also elaborated, emphasizing that even items with a long life can be considered consumed if used in the vessel.

Additionally, the Board's Circular No. 89/88-CX.6 clarified that the expression "Stores" for consumption on board a vessel includes both consumable and non-consumable stores for the use of the ship and crew members. The term "consumption" in Central Excise denotes "use," covering stores meant for the vessel and crew members. The definition of "stores" in Section 2(38) of the Customs Act, 1962, was also referenced to support this interpretation.

Given the comprehensive analysis and precedents cited, the Tribunal set aside the impugned order and allowed the appeal with consequential relief, as the issue was deemed to be adequately covered by existing legal interpretations and definitions.

(Pronounced in Court)

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