2019 (8) TMI 1234 - AT - Central Excise

Appellant company wins exemption appeal despite missing listing in notification

Hercules Hoists Ltd, MS Saigal, Nishant P Saigal Versus Commissioner of Central Excise Mumbai – II

The Tribunal overturned the demand against the appellant-company for supplies to M/s Bharat Earth Movers Ltd, finding the appellant eligible for exemption ... Supplies made to Ministry of Defence by specified organisation - benefit of N/N. 63/1995-CE dated 16th June 1995 (at serial no. 1 and serial no. 2) - HELD THAT:- The eligibility of appellant-company for exemption on goods supplied to M/s Bharat Earth Movers Ltd, which are, in turn, intended for Ministry of Defence is no longer res integra - the issue stands settled by the decision of the Hon’ble High Court of Karnataka in THE COMMISSIONER OF CENTRAL EXCISE BENGALURU-V VERSUS M/S. DATASOL INNOVATIVE LABS [2017 (2) TMI 1171 - KARNATAKA HIGH COURT] and that the decision relied upon in the impugned order has since been overruled by the Hon’ble High Court of Rajasthan in M/S NATIONAL ENGINEERING IND. LTD. VERSUS COMMISSIONER CENTRAL EXCISE-I, CENTRAL REVENUE BUILDING, STATUTE CIRCLE, C-SCHEME, JAIPUR [2017 (11) TMI 879 - RAJASTHAN HIGH COURT] - demand set aside. Goods required for setting up of ‘water supply plants and pipes’ to deliver water from source to the ultimate storage facility - benefit of N/N. 03/2004-CE dated 8th January 2004 - HELD THAT:- In relation to the exemption intended for water supply plants, the denial arose from the deficiency of the certificate issued by the competent head of the district. The lower authorities have held so in the absence of a substitute certificate for the one that was misplaced by them while shifting their office. However, it is the plea of the Learned Counsel for the appellant that this is not the correct factual position inasmuch as the certificates had been submitted to the appropriate central excise authorities who were unable to trace the same - it is only proper that the original authority makes an effort to recover the said documents and render a finding thereafter on the eligibility thereof. In the absence of such certification, it was inappropriate for the lower authority to come to a conclusion that the appellant-assessee was not eligible for the exemption. Benefit of N/N. 6/2006-CE dated 1st March 2006 - parallel provisions in notification no. 21/2002-CE dated 1st March 2002 intended to confer non-discriminatory treatment to goods manufactured in India and to those imported for execution of projects contracted through international competitive bidding - HELD THAT:- It would appear that the lower authorities had not paid due attention to the conditions prescribed and the required level of compliance - matter placed on remand for reconsideration. Appeal allowed by way of remand. Issues:Challenges to confirmation of demand arising from denial of exemption notifications for three different business activities.Analysis:The appeals in this case were against the confirmation of a demand amounting to Rs. 17,90,141 arising from the denial of exemption notifications related to three distinct business activities. The first demand was due to the ineligibility to avail the benefit of notification no. 63/1995-CE dated 16th June 1995, intended to exempt supplies made to the Ministry of Defence by specified organizations. The second demand followed the denial of exemption under notification no. 03/2004-CE dated 8th January 2004 for goods required for setting up 'water supply plants and pipes.' The third demand was a result of the finding of ineligibility for exemption under notification no. 6/2006-CE dated 1st March 2006, which is linked to provisions in notification no. 21/2002-CE dated 1st March 2002 regarding non-discriminatory treatment to goods manufactured in India and those imported for projects contracted through international competitive bidding.The impugned order held against the appellant-company concerning supplies made to M/s Bharat Earth Movers Ltd, as the appellant's name was not specifically listed in the relevant notification despite the supplies being eligible. However, a decision by the Hon'ble High Court of Karnataka and a subsequent decision by the Hon'ble High Court of Rajasthan overruled the basis of the impugned order, establishing the appellant's eligibility for exemption on goods supplied to M/s Bharat Earth Movers Ltd for the Ministry of Defence.Regarding the exemption for water supply plants, the denial was due to a misplaced certificate by the lower authorities, which the appellant claimed had been submitted but could not be traced. The appellant argued that the original authority should make efforts to recover the documents and assess eligibility based on the recovered evidence. Similarly, for supplies made in connection with projects after international competitive bidding, the appellant contended that the lower authorities did not pay adequate attention to the conditions prescribed in the notifications and the level of compliance required.In conclusion, the Tribunal set aside the demand related to supplies to M/s Bharat Earth Movers Ltd and remanded the remaining disputed points back to the original authority for a fresh decision in line with the observations made during the proceedings.