1999 (8) TMI 208 - AT - Central Excise

Appellate Tribunal rules Ice Cub maker cabinets not eligible for Navy ship stores exemption

The Appellate Tribunal ruled that Ice Cub maker cabinets manufactured by the Respondents and supplied to a company were not eligible for exemption under ... Not eligible for benefit under Notification No. 70/77-C.E. Issues Involved:The issue involves the interpretation of Notification No. 70/77-C.E. dated 7-5-1977 regarding the exemption of excisable goods supplied as ship stores for consumption on board a vessel of the Indian Navy.Interpretation of Notification No. 70/77-C.E.:The Appellate Tribunal considered the appeal filed against the Order-in-Appeal dated 30-8-1993, where the benefit of the aforementioned notification was granted to Ice Cub maker cabinets manufactured by the Respondents and supplied to M/s. Voltas Ltd. The Tribunal noted that the exemption under the notification is available only for goods supplied as stores for consumption on board a vessel of the Indian Navy, excluding cigarettes. It was argued that the goods in question, manufactured by the Respondents, were not supplied for use as ship stores for the Indian Navy but were instead supplied to M/s. Voltas Ltd. and subsequently to M/s. Garden Reach Ship Builder Engineering Pvt. Ltd.Analysis of Goods Supplied:Upon review of the records and the relevant notification, it was observed that the Respondents were manufacturing Ice Cub Making Cabinets supplied to M/s. Voltas, seeking the benefit of Notification No. 70/77-C.E. dated 7-5-1977. The notification specifically exempts excisable goods supplied as stores for consumption on board a vessel of the Indian Navy from excise duty. As per the definition of stores under Section 2 of the Customs Act 1962, goods for use in vessels include fuel, spare parts, and other equipment. Since the goods were not supplied for use as ship stores for the Indian Navy but were instead supplied to M/s. Voltas Ltd., the Tribunal concluded that the Respondents were not entitled to the benefit of the notification. Consequently, the impugned order was set aside, and the appeal was allowed.This judgment clarifies the scope and conditions for availing the exemption under Notification No. 70/77-C.E. dated 7-5-1977, emphasizing the requirement for goods to be supplied as ship stores for consumption on board a vessel of the Indian Navy to qualify for the exemption from excise duty.