2023 (10) TMI 1104 - AT - Central Excise

Tribunal upholds Central Excise duty exemption for hydro mechanical works despite department's challenge to precedent validity

Commissioner, Central Excise & Central Goods & Service Tax Commissionerate, Udaipur Versus M/s Om Metals Infraprojects Ltd.

The CESTAT New Delhi dismissed an appeal challenging exemption from Central Excise duty on Huydel Gates, Hoist Mechanism Gate Parts and materials for ... Exemption from Central Excise duty - Huydel Gates, Hoist Mechanism & Gate Parts and materials including mandatory tools and tackles for hydro mechanical works cleared to Mega Power Project of NPTC - applicability of N/N. 06/2006-CE dated 01.03.2006 and N/N. 12/2012-CE dated 17.03.2012 - HELD THAT:- It is open to the Board to issue instructions that appeal should not be filed where the monetary aspect is not very high to reduce litigation, but it cannot be urged by the appellant that the decision of the Tribunal would not have any precedent value. Any decision of the Tribunal would continue hold the field till it is set aside by the High Court or the Supreme Court. It is only because of the Circular that a ground has been taken in this appeal that the Commissioner (Appeals) erred in relying upon case laws which were not acceptable to the department as the appeal was withdrawn from the Supreme Court on monetary limits. The intention of the Circular is to prevent an assessee from asserting that the department has accepted the decision. ‘Such cases’ in the Circular refers to decisions taken by the authority not to file an appeal because of monetary limits and not to the decision of the Tribunal. There is, therefore, no merit in this appeal. It is accordingly dismissed. Issues involved:The appeal concerns the entitlement to duty exemption under Notification No. 06/2006-CE dated 01.03.2006 and Notification No. 12/2012-CE dated 17.03.2012 for goods supplied against International Competitive Bidding for a Mega Power Project.Summary:Issue 1: Entitlement to duty exemption under NotificationsThe department appealed against the order allowing duty exemption to the respondent based on Tribunal decisions in their own case. The respondent, M/s Om Metals Infraprojects Ltd., was awarded a contract to supply equipment for a Hydro Electric Project, and claimed exemption under the Notifications due to goods supplied against International Competitive Bidding. The Adjudicating Authority initially denied the exemption, leading to the appeal before the Commissioner (Appeals).Issue 2: Commissioner (Appeals) DecisionThe Commissioner (Appeals) allowed the appeal, citing the Tribunal's decisions in the respondent's favor. The Commissioner noted that the goods were cleared for the Hydro Electric Project and were eligible for duty exemption under the relevant Notifications. The Commissioner emphasized that the exemption was applicable to goods supplied against International Competitive Bidding, as per the conditions specified in the Notifications.Issue 3: Department's Objection and CircularThe department objected to the reliance on Tribunal decisions, citing a Circular that limits the precedent value of decisions not appealed due to monetary limits. The Circular states that such cases should not be considered as having precedent value. However, the Tribunal decisions remain binding until overturned by a higher court.Issue 4: Decision and Dismissal of AppealThe Tribunal upheld the Commissioner (Appeals) decision, stating that the Commissioner was bound by the Tribunal's decisions in the appellant's case. The appeal was dismissed, emphasizing that the Tribunal's decisions hold precedence until challenged in a higher court. The Circular's intention is to prevent the assertion that the department accepted a decision due to monetary limits, not to diminish the value of Tribunal decisions.In conclusion, the appeal was dismissed, affirming the entitlement of the appellant to duty exemption on specific goods supplied for the Mega Power Project in accordance with the relevant Notifications.