CESTAT rules goods not for Indian Navy vessels not exempt under Notification 64/95-C.E.

The Appellate Tribunal CESTAT, New Delhi, comprising of S/Shri V.K. Agrawal and P.S. Bajaj, addressed the eligibility of exemption under Notification No. 64/95-C.E. for goods cleared by M/s. Leader Engg. Works. The Tribunal ruled that goods supplied to M/s. Mazagaon Dock Ltd. did not qualify for the exemption as they were not intended for consumption on board Indian Navy vessels. The Tribunal emphasized that the goods must be supplied as "stores" for consumption on board an Indian Navy vessel or Coast Guard. Consequently, the Tribunal dismissed the appeal, upholding the denial of exemption by the Commissioner (Appeals).

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Issues involved:
- Whether the benefit of exemption under Notification No. 64/95-C.E. is available to excisable goods cleared by M/s. Leader Engg. Works.

Analysis:
The Appellate Tribunal CESTAT, New Delhi, comprising of S/Shri V.K. Agrawal, Member (T) and P.S. Bajaj, Member (J), addressed the issue of exemption eligibility in the appeal by M/s. Leader Engg. Works. The dispute revolved around the applicability of Notification No. 64/95-C.E., dated 16-3-1995 to the goods cleared by the appellants. The Notification grants exemption to goods supplied as "stores" for consumption on board an Indian Navy vessel, excluding cigarettes. The Appellants, who manufacture valves and cocks, sought exemption for goods supplied to M/s. Mazagaon Dock Ltd. The Commissioner (Appeals) had previously denied the exemption based on a Tribunal decision stating that goods supplied to Ship Builders are not eligible under the Notification as they were not directly provided to the Indian Navy as stores. The Tribunal emphasized that the goods must be supplied as stores for consumption on board an Indian Navy vessel or Coast Guard, which was not the case with the supplies to Mazagaon Dock. The Tribunal rejected the argument that a certificate from the Indian Navy would suffice for exemption, as the goods were not intended for consumption on board Navy vessels. Additionally, the Tribunal disagreed with the contention that no penalty should be imposed, especially since some goods were cleared without duty payment post the Tribunal's earlier decision. Consequently, the Tribunal dismissed the appeal filed by the Appellants.

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