Government-owned mint exemption continues after corporatisation; excise demand, penalty and related payments were set aside as refundable.

A government-owned mint remained an institution belonging to the Government of India after corporatisation because all shares were held by the Union, administrative and financial control stayed with the Government, and the entity continued sovereign minting functions under governmental authority. On that basis, the exemption under Notification No. 62/95-C.E. continued to apply, and the later substitution by Notification No. 3/2010-C.E. supported that position. As the exemption stood, the confirmed excise demand could not survive; the penalty under Rule 27 was also unsustainable. The duty, interest, and penalty already paid pursuant to the impugned order were therefore refundable.

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Issues: (i) Whether the appellant-mint continued to be an institution belonging to the Government of India after corporatisation so as to remain eligible for exemption under Notification No. 62/95-C.E. dated 16.03.1995; (ii) whether the demand, interest, penalty, and consequential refund claim could survive.

Issue (i): Whether the appellant-mint continued to be an institution belonging to the Government of India after corporatisation so as to remain eligible for exemption under Notification No. 62/95-C.E. dated 16.03.1995.

Analysis: The appellant was earlier operating as a Government unit manufacturing circulation coins and medals. After incorporation of SPMCIL, the assets, liabilities, contracts, agreements, and MOUs of the nine units were transferred to the company, but the Memorandum of Association showed that the company continued to perform the same minting and related functions under the authority and approval of the Government of India. The shareholding record and audited statements showed that the Government of India held 100% of the shares throughout the relevant period, and the Government retained complete administrative and financial control. The activity of minting coins was treated as a core sovereign function, and the later substitution made by Notification No. 3/2010-C.E. dated 27.02.2010 reinforced the continued applicability of the exemption to India Government Mint, Kolkata.

Conclusion: The appellant remained entitled to the exemption under Notification No. 62/95-C.E. dated 16.03.1995 even after corporatisation, and the finding was in favour of the assessee.

Issue (ii): Whether the demand, interest, penalty, and consequential refund claim could survive.

Analysis: Once the exemption was held to be applicable, the confirmed duty demand could not stand. The penalty imposed under Rule 27 of the Central Excise Rules, 2002 was also unsustainable. Since the amounts had already been paid pursuant to the impugned order, the appellant became entitled to refund of the duty, interest, and penalty paid.

Conclusion: The demand, interest, and penalty were set aside and refund was held admissible, in favour of the assessee.

Final Conclusion: The exemption was held to continue after corporatisation, the confirmed excise demand and penalty were annulled, and refund of the amounts paid pursuant to the impugned order was directed.

Ratio Decidendi: A government-owned mint that continues to function under complete governmental control and performs sovereign minting functions remains an institution belonging to the Government of India for the purpose of the exemption notification, notwithstanding corporatisation.

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