CESTAT upholds subcontractor's exemption eligibility under Notification No. 108/95 CE

C.C.E., Meerut-I Versus Pioneer Fabricators Pvt. Ltd.

C.C.E., Meerut-I Versus Pioneer Fabricators Pvt. Ltd. - TMI Issues:
- Appeal against Order-in-Appeal No. 201-CE/MRT-I/2008 dated 28.11.2008
- Eligibility for exemption under Notification No. 108/95 CE
- Interpretation of subcontracts and certification requirements
- Applicability of previous judgments by different High Courts and Supreme Court

Analysis:

The appeal before the Appellate Tribunal CESTAT ALLAHABAD was filed by the Revenue against the Order-in-Appeal No. 201-CE/MRT-I/2008 dated 28.11.2008 passed by the Commissioner (Appeal) Customs & Central Excise, Meerut-l. The case involved the eligibility of the respondent-assessee for exemption under Notification No. 108/95 CE, relating to the supply of goods for specific projects. The respondent had cleared goods at Nil rate of duty under this notification, leading to a dispute with the Revenue regarding the interpretation of subcontracting and certification requirements.

The main contention revolved around whether the respondent, as a subcontractor, was eligible to claim the exemption under the said notification or if the benefit was limited to the main contractors directly supplying goods for projects financed by United Nations or International Organizations. The Original Authority had upheld the Revenue's position, leading to the imposition of a demand and penalty on the respondent. However, the Commissioner (Appeals) overturned the decision, citing subcontracts between the main contractors and the respondent, along with certified statements of receipt of goods and money transactions, to support the respondent's eligibility for the exemption.

In the judgment, the Appellate Tribunal referred to a previous case law involving IBM India Pvt. Ltd. vs. Commissioner of Central Excise, Pondicherry, reported at 2008(223) ELT 429 (Tri. Chennai), which was deemed relevant to the present case. The Tribunal noted that the Hon'ble Madras High Court had ruled in the case of C.C.E. Pondicherry vs. Caterpillar India Pvt. Ltd., affirmed by the Hon'ble Supreme Court, that the exemption under Notification No. 108/95 CE applied to goods supplied to contractors executing projects financed by United Nations or International Organizations.

Ultimately, the Appellate Tribunal rejected the Revenue's appeal, upholding the respondent's eligibility for the exemption under Notification No. 108/95 CE based on the interpretation of relevant case laws and the specific circumstances of the case. The judgment emphasized the importance of considering previous legal precedents and the specific project details in determining the applicability of tax exemptions in such cases.