1999 (3) TMI 185 - AT - Central Excise

Tribunal Overturns Denial of Exemption for Earthquake Relief Supplies

The Tribunal granted Central Excise Duty exemption under Notification No. 128/94 for the supply of excisable goods for earthquake relief work. The denial ... Exemption for earthquake relief Issues:Availability of Central Excise Duty exemption under Notification No. 128/94 for supply of excisable goods for earthquake relief work.Analysis:The key issue in the appeals filed by two companies was the denial of Central Excise Duty exemption for supplying goods for earthquake relief work due to procedural reasons. The denial was based on the grounds that the goods were not directly supplied from the factory as required by the notification, lacked certification on clearance documents for earthquake relief activity, and posed challenges in correlating with the End-use Certificate of the State Govt.The consultant representing the appellants argued that the denial was primarily based on the indirect clearance of goods through the manufacturer's depot instead of directly from the factory. The consultant contended that the goods were intended for earthquake relief, as evidenced by gate-passes and invoices mentioning the consignee for relief work and the relevant exemption notification. The consultant cited a precedent emphasizing that once goods qualify for an exemption, narrow interpretation should not exclude them. The consultant highlighted that the goods were certified for earthquake relief by the District Collector after being consigned from the factory.The Departmental Representative argued that the conditions in the notification were crucial to prevent misuse of exempted goods and should not be disregarded as mere procedural requirements. However, the Tribunal examined the invoices and found clear indications that the goods were consigned for earthquake relief work, meeting the certification condition specified in the notification. The Tribunal noted that the goods were not mixed up at the depot and were directly sent to the consignee for relief work, supporting the consultant's argument. Relying on the Apex Court's judgments and the District Collectors' certification of the goods' end-use for relief work, the Tribunal concluded that the exemption should be granted as the goods were indeed used for the intended purpose.In light of the above analysis and findings, the Tribunal found merit in the appeals and overturned the Orders-in-Appeal, granting the exemption for the supply of goods for earthquake relief work.