2004 (8) TMI 242 - AT - Central Excise

Appellant wins exemption claim under Central Excise Act for project supplies

The appellant, an assessee under the Central Excise Act, claimed exemption under Notification 108/95-C.E. for goods supplied to a project financed by ... Exemption under Notification 108/95-C.E. - Certificate from Nodal Ministry for supplies to projects financed by international organisations - Supply through main contractor/sub-contractor - proof of supply to project site - Government approval of project as World Bank / IBRD aided projectExemption under Notification 108/95-C.E. - Certificate from Nodal Ministry for supplies to projects financed by international organisations - Government approval of project as World Bank / IBRD aided project - Whether the appellant was entitled to exemption under Notification 108/95-C.E. for goods supplied for the NTPC project in view of the certificates and approvals produced. - HELD THAT: - The Tribunal found that the materials produced by the appellant satisfied the certification and approval preconditions of Notification 108/95-C.E. The record included an IBRD funding certificate to NTPC, NTPC's project authority order on BHEL, Planning Commission/Ministry of Power approval and departmental circulars, together with a certificate from the Under Secretary, Ministry of Power, certifying Government approval of the project and the subject supply under the BHEL contract. The CCE(A)'s denial rested on the alleged absence of the specific form of certificate and on requiring proof of actual delivery at site. The Tribunal held that supplies made pursuant to a contract for an approved project and substantiated by the statutory/ministerial certificates and contractual position of the appellant as a sub-contractor sufficiently established entitlement to the exemption; there was no requirement to insist on separate proof of physical delivery to site where the contract and certificates demonstrate that the goods were intended for the approved, IBRD-financed project. [Paras 3, 4]The appellant was entitled to the exemption under Notification 108/95-C.E.; the denial by the lower authority is set aside and the appeal is allowed.Final Conclusion: The Tribunal allowed the appeal, holding that the certificates and contractual position established eligibility for exemption under Notification 108/95-C.E. for supplies to the approved IBRD/World Bankaided NTPC project and quashed the denial by the lower authority. Issues involved: Claim of exemption under Notification 108/95-C.E. for goods supplied to NTPC project financed by IBRD.Summary:The appellant, an assessee under Central Excise Act, 1944, claimed exemption under Notification 108/95-C.E. for goods supplied to M/s. BHEL, who in turn were to supply to NTPC project guaranteed by IBRD. The claim was rejected due to lack of required certificate from Nodal Ministry in the Government of India. Commissioner (Appeals) upheld the rejection stating the claim was unsubstantiated. However, after considering the material on record, it was found that the appellant's supplies to the NTPC project were eligible for the exemption as per the notification requirements. The denial of benefit based on failure to prove actual supply to the project site was not upheld. The appellant had submitted relevant certificates and documents to support their claim, and the performance of the contract ensured eventual supply to the project site. Consequently, the order rejecting the claim was set aside, and the appeal was allowed.The relevant portion of Notification 108/95-C.E. exempts goods supplied to projects financed by the United Nations or an International organisation and approved by the Government of India. The appellant's supplies to the NTPC project, as a sub-contractor to M/s. BHEL, were found to be eligible for the exemption. The denial based on failure to prove actual supply to the project site was not conclusive, as the contract performance ensured eventual delivery to the approved project site.The CCE (A) was found to be exceeding the scope of the notice issued, as the issues disputed were not in line with the allegations in the Show Cause Notice. The appellant had submitted relevant certificates and documents, including JBRD funding Certificate, NTPC's order on BHEL, Planning Commission Approval, and Public Notices from the Ministry of Finance, to support their claim for exemption under the notification requirements.The order rejecting the claim for exemption under Notification 108/95-C.E. was set aside, and the appeal was allowed based on the appellant's compliance with the notification requirements and the approval of the project by the Government of India.