2007 (10) TMI 182 - AT - Central Excise

Tribunal allows appeal, emphasizes Notification benefits not to be denied due to lack of direct supply.

The Tribunal set aside the impugned order and allowed the appeal, emphasizing that the benefit of the Notification should not be denied based solely on ... Exemption under Notification No. 108/95-CE - supply to projects financed by international organisations - condition of production of certificate from project implementing authority - supply to contractor or sub-contractor vis-a-vis project implementing authorityExemption under Notification No. 108/95-CE - supply to contractor or sub-contractor vis-a-vis project implementing authority - Benefit of Notification No. 108/95-CE is not to be denied merely because goods were supplied to the contractor executing the project instead of being directly supplied to the project implementing authority. - HELD THAT: - The Tribunal examined the condition in Notification No. 108/95-CE which required production of a certificate from the project implementing authority certifying that the goods were required for execution of a Government of India approved project financed by an international agency. In the present case the requisite certificate was issued by the Principal Secretary, Health and Family Welfare Department, Government of West Bengal, and was produced to and accepted by the jurisdictional Central Excise authority. The only reason given in the impugned order for denial was that the goods were not directly supplied to the project implementing authority. The Tribunal observed that the Notification does not insist on direct supply to the project implementing authority and that all other substantive conditions of the Notification stood complied with. The Tribunal further relied on its earlier decisions in Caterpillar India Pvt. Ltd. , Automatic Electric Ltd. and SPIC Organics Ltd. , where similar supplies to contractors or sub-contractors were held eligible for the Notification when other conditions were satisfied. In view of the foregoing, the Tribunal held that the lower appellate authority erred in denying exemption solely on the ground of non-direct supply to the project authority, and that the exemption should have been allowed. [Paras 2, 4, 5]Impugned order set aside and appeal allowed; benefit of the Notification extended to the assessee despite supply to contractor.Final Conclusion: The Tribunal allowed the appeal, setting aside the impugned order, and held that compliance with the Notification (including production and acceptance of the project certificate) entitled the assessee to exemption even though the goods were supplied to the contractor executing the project. Issues:1. Interpretation of Notification No. 108/95-CE dated 28-8-1995 regarding exemption from Excise duty for goods supplied to projects financed by international organizations approved by the Government of India.2. Denial of benefit of the Notification due to goods not being directly supplied to the project implementing authority.Analysis:1. The key issue in this case was the interpretation of Notification No. 108/95-CE dated 28-8-1995, which granted total exemption from payment of Excise duty for goods supplied to projects financed by international organizations approved by the Government of India. The condition for exemption required the manufacturer to produce a certificate from the project implementing authority, as well as approval from the Government of India. In this instance, the goods were supplied to a project financed by the International Development Association and approved by the Government of India. The certificate was issued by the Principal Secretary of the Health and Family Welfare Department, Government of West Bengal, confirming the project details and the intention to procure goods without duty payment. The jurisdictional officer accepted the certificate, extending the benefit of the Notification to the goods supplied. The appeal arose when the department filed an appeal with the Commissioner (Appeals) challenging this decision.2. The impugned order denied the benefit of the Notification to the assessee on the grounds that the goods were not directly supplied to the project implementing authority. However, the Tribunal noted that similar objections had been raised in previous cases where it was held that as long as all other conditions of the Notification were met, the benefit should not be denied solely on the basis of direct supply to the project implementing authority. The Tribunal emphasized that the Notification did not explicitly require direct supply to the project authority. Since the appellants had complied with all substantive conditions of the Notification, the Tribunal found no valid reason to deny the benefit. The lower appellate authority had overlooked this interpretation, leading to the appeal being allowed in favor of the assessee.In conclusion, the Tribunal set aside the impugned order and allowed the appeal, emphasizing that the benefit of the Notification should not be denied based solely on the lack of direct supply to the project implementing authority when all other conditions were met.