TaxTMI 
TaxTMI 
2011 (9) TMI 391
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....ade, were financed by Japan Bank of International Co-operation, which is not one of the international organization listed in the notification read with Section 3 of the United Nations (Privileges and Immunities Act, 1947), Revenue entertained a view that exemption was not available to the appellant. Accordingly, show cause notice was issued to the appellant on 28.06.02, invoking longer period of limitation, proposing confirmation of demand and imposition of penalty. It is seen that some of the certificates were cancelled by project authority subsequently after issuance of show cause notice. The said show cause notice culminated into an order passed by the Commissioner confirming demand and imposing penalty. 3. Though the learned advocate appearing for the appellant has advanced arguments on merit as also on limitation, we find that the present appeal can be disposed off on the issue of time bar as the show cause notice stands issued by invoking longer period of limitation. Clearances were being effected by the appellant on the basis of purchase order placed upon them by the authority. Project implementing authority issued relevant certificates for duty exemption in terms of Noti....
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....had to rely upon the certificate granted by the appropriate authority. 7. We find that one of the conditions of the notification is obtaining of certificate from the project implementing authority. Undoubtedly, such certificate stand obtained by the appellant and produced on record at the time of clearance of the goods. As such, certificate validly issued by the authority, were in existence and in the hands of the appellant. Such certificates were neither cancelled nor challenged by the Central Excise department at the time of clearance and were holding the field, on the basis of which the appellants cleared the goods without payment of duty. As such, it has to be held that the appellants have complied all the conditions of the notification at the time of clearance of the goods. The only requirement of the notification relating to the production of such certificate, which stand duly complied with by the appellant, the benefit of the same cannot be denied. It is not for the Central Excise authority to question or contest the correctness or otherwise of the said certificate so issued by the project implementing authority. As long as the certificates are issued and are found to be ....
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....paid or has been short-levied or short paid or [erroneously refunded, whether or not such non-levy or non-payment, short levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made there under], a Central Excise Officer may, within [one year] from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short levied or short paid or to whom the refund has erroneously been made, requesting him to show cause why he should not pay the amount specified in the notice." From the Section it can be seen that the short levy could have occurred on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of the Act or Rules made there under. In this case, the appellants produced a certificate to the Assistant Commissioner as required in the notification, the Assistant Commissioner allowed the appellant to clear the goods without payment of duty and subsequently....
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....of certificate by the implementing authority would be of no avail. It is only in the case where goods are supplied to a project financed by a recognised international organization and the project has been approved by the Govt. of India for implementation by the State, a certificate issued in terms of para c(ii) would be required for availing of the exemption from payment of excise duty. For granting such a certificate, the implementing authority has to look to the conditions set out in the notification and nowhere else. What is postulated in para (c)(ii) of the Exemption Notification is a certificate in terms of the conditions prescribed in para c of the Notification. There is no warrant for assuming that the Notification envisages conditions for the issue of the certificate other than those specified by itself. There is nothing in the language of the notification to suggest that a certificate can be issued by the implementing authority either to declare an organisation as international organisation or to treat JBIC as a declared international organisation. The conditions for availing exemption in the Notification are clearly specified therein and are exhaustive. The Exemption Noti....
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..... The implementing authority is merely empowered to issue certificates certifying the facts to the extent specified in para (c)(ii). It is not the certificate by the implementing authority which confers the exemption, but the fulfilment of the conditions specified in the Exemption Notification which alone confers the eligibility to exemption in terms of para (c) of the Notification. As already held, the conditions specified in the Exemption Notification are not satisfied. The above observation of the High Court clearly show that for determining the eligibility of the goods for exemption what was relevant to be considered is whether the project is eligible in terms of the notification and JBIC is a declared International Organization. Once these two conditions are not satisfied, the issuance of the certificates by implementing authority would be of no avail. Therefore, when the certificate itself is held to be of no avail, the question of effect of cancellation does not arise. Therefore, the plea that certificate was valid at the time of clearance does not help the appellant and therefore the judgments cited by the appellants are also not relevant. 15. I am also not able to ac....
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....purchaser will not compensate the bidder. Bids of bidders who do not accept this provision will be declared as non-responsive and rejected. (ii)Cl. Wo. 24.7, ITB, Vol-I of bidding documents Excise Duty: Excise duty on finished products for supply against aided projects under ICB is reimbursable by Government of India as supplementary cash assistance. It shall not be paid by the purchaser and the supplier should claim the cash assistance directly from Government of India. This may be read with clause No. 15.2 of this section". 15.1 The condition that once bids are submitted taking into account the various benefits, in case of failure to get some benefit due to any reasons including statutory variation or change in the policy of Government, the purchaser will not compensate the bidder. Therefore it cannot be considered that appellant were not aware of the condition while submitting bids. 15.2 Further, as early as 26 Oct 1998, the Assistant Commissioner of Central Excise, Division-II, Vapi had written to the appellants that the permission is subject to the following conditions :- The assessee will produce within one week's time but by 29.10.98 the relevant production of....
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....eliance has been placed upon the judgment of the Calcutta High Court in I.T.C. Limited v. U.O.I, wherein it was laid down that Section 11A of the Excise Act is not a machinery Section and it is a substantive provision and a complete code for realization of excise duty in case of short-levy. 15.4 From the above it can be seen that the Hon'ble High Court has clearly held that neither the certificate nor the departmental action in allowing clearance help the assessee. Appellants are not being asked to perform any impossible task in this case by issue of show cause notice but they are being required to pay duty because they are ineligible for exemption. Payment of duty is not an impossible task. In HICO Enterprises, the stand of the department was that the appellant were not eligible for the exemption in view of the fact that transferor of the license to the appellant had not fulfilled the conditions thereby rendering him in eligible for the license itself but by the time it was known that he had made a mis-declaration to the DGFT and obtained the license and the license had already been transferred and therefore the appellant HICO Enterprises, the transferee of the license could no....
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....t one of the Agency covered by the notification. The notification only requires the manufacturer to produce the certificate from the authorities as specified before clearance. Notification does not require the approval or clearance of the Assistant Commissioner and what is required is production of certificate before clearance. Therefore, even after the Assistant Commissioner's advice that the goods are not eligible for exemption, assessee can still clear goods without payment of duty. The only option available to the Assistant Commissioner would be to issue show cause notice and show cause notice has be issued under Section 11A within one year from the relevant date. Therefore, production of certificate before clearance protects the assessee from invocation of extended period and nothing more. (b) Once the facts are known to the department, the period is limited to one year and the show cause notice can be issued for short levy even in the cases where the department has made a mistake. In case of any mis-interpretation of Notification/ classification/ valuation etc show cause notice can always be issued within one year for correction. Therefore, what is required to be considere....
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....al relief to the appellant as held by Member (Judicial). (Pronounced in the Court 2009) (Archana Wadhwa) Member (J) (B.S.V. Murthy) Member (T) Date: 12.2.2009 ORDER NO.M/1653/WZB/AHD/2010 Per: B.S.V. Murthy: Vide order No.M/225/WZB/AHD/09 dated 18.12.08, difference of opinion was recorded as under: "Whether the demand for the period within limitation period it to be confirmed and matter remanded to original adjudicating authority for re-quantification of demand as held by Member (Technical) or the impugned order is to be set aside in totality and allow the appeal with consequential relief to the appellant as held by Member (Judicial)." 2. The matter was referred to the Hon'ble President to nominate a third Member to decide on the difference. Hon'ble President in his order dated 10.08.10 observed that the two Members cannot refer the entire appeal because of difference of opinion instead of making a statement referring the point or points of difference between them. He relied upon the decision of the Hon'ble Gujarat High Court in the case of Colour tech Vs. UOI reported in 2006 (198) ELT 169 (Guj.) reiterated by the Hon'ble High Court in the case of CCE & ....
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....under: Difference of Opinion i) Whether once the certificate for exemption issued by the Project Implementing Authority is produced exemption cannot be denied as held by learned Member (Judicial) or whether the Revenue can deny the exemption by issue of show cause notice under Section 11A as held by Member (Technical). ii) Whether subsequent cancellation of valid certificates can result in denial of exemption by relying upon the decision of the Hon'ble Andhra Pradesh High Court in the case of Sterlite Industries (I) Ltd. [2005 (189) ELT 226 (A.P)] as held by Member (Technical) or subsequent cancellation will have to be held to have no retrospective effect as held by learned Member (Judicial) relying on the decision of the Hon'ble Supreme Court in the case of M/s. Vadilal Chemicals [2005 (192) ELT 33 (S.C)]. iii) Whether in view of the fact that certificates were neither cancelled nor challenged by the central excise department at the time of clearance, central excise department cannot issue show cause notice subsequently for recovering differential duty as held by learned Member (Judicial) or the department can issue show cause notice as held by Member (Technical). i....
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....ed a certificate duly countersigned by the principal secretary, the same being accepted as correct during the period when the clearances took place, Central Government Authorities cannot question the veracity of such certificate. For this proposition, he would rely upon the following decisions: 1. Andhra Sugar [2005 (121) RLT 659 (Tri.)] 2. Bombay Chemicals [1990 (49) ELT 190 (Bom.)] 4. Alternatively, he would submit that certificate issued by the Project Implementing Authority even if it is issued wrongly they are valid till they are cancelled. For this proposition he would rely upon the following decisions: 1. TATA Iron & Steel Co. Ltd. [2001 (129) ELT 434 (Tri.)] 2. BPR Tex Prints [2001 (136) ELT 935 (Tri.)] 5. It is his submission that once an eligibility certificate for exemption has been issued by the proper authority, exemption cannot be denied by subsequent cancellation of the same. It is his submission that this proposition is supported by the following decisions" 1. Vadilal Chemicals [2005 (192) ELT 33 (SC)] 2. MRF Ltd. [2006 (206) ELT 6 (SC)] 6. Learned counsel would submit that the supplier cannot perform a impossible task of ascertaining as t....
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.... is not as per the United Nations Act, and the benefit of the said notification cannot be granted. He would also rely upon the judgment of the Hon'ble Supreme Court in the case of State of Jharkand Vs. Ambay Cements - 2004 (178) ELT 55 (SC) for this proposition that interpretation of the statute should be in a particular manner and they cannot be done in any other way. He would expand this proposition by saying that once JBIC is not considered as an international organization under United Nations, the question of considering the clearances made within the limitation period as correct would not arise at all. 10. I have considered the submissions made at length by both sides and perused the records. 11. It is undisputed in this case that the assessee during the relevant period effected the clearances within the period of limitation, had produced the certificates issued by the Project Implementing Authority, countersigned by the principal secretary to the State Government indicating that the said project is financed by JBIC and is eligible for the benefit of Notification No. 108/95. It is also undisputed that subsequently, the very same Project Implementing Authority had issued ....
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....or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, by such person or his agent, to whom a notice is served under the proviso to sub-section (1) by the Central Excise Officer, may pay duty in full or in part as may be accepted by him, and the interest payable thereon under section 11AB and penalty equal to twenty-five per cent of the duty specified in the notice or the duty so accepted by such person within thirty days of the receipt of the notice. (2) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of duty of excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. Provided that if such person has paid the duty in full together with, interest and penalty under sub-section (1A), the proceedings in respect of such person and other persons to whom notice are served under sub-section (1) shall, without prejudice to the provisions of section 9, 9A and....
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....ssion of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty. Explanation 2. - For the removal of doubts, it is hereby declared that the interest under section 11AB shall be payable on the amount paid by the person under this subsection and also on the amount of short-payment of duty, if any, as may be determined by the Central Excise Officer, but for this sub-section. (2C) The provisions of sub-section (2B) shall not apply to any case where the duty had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President. (3) For the purposes of this section, - (i) "refund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (ii) "relevant date" means, - (a) in the case of excisable goods on which duty of excise has not been levied or paid or has been short-levied or short-paid - (A) where under the rules made under this Act a periodical return, showing particulars of the duty paid on the excisable goods removed d....
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....it that in his case there cannot be any duty liability. I find that in those cases, the issue and the facts were totally different. In the case in hand, it is undisputed that provisions of Section 11A(1) would be applicable for the clearances made from the factory premises. In those cases, the issue was regarding cancellation/licenses which were produced before the authorities for the clearances and mostly in respect of consignments which were imported. As regards the reliance placed by the learned counsel on the judgment of the Hon'ble Supreme Court in the case of Vadilal Industries, I find that the said judgment is in respect of an issue under the sales tax, wherein the provisions were not pari-materia to the provisions of Section 11A(1) of the Central Excise Act, as it stood during the relevant period. 15. At this juncture, I would also like to bring on record that provisions of Section 11A(1) of Central Excise Act, 1944 as is reproduced by me came into effect from 1980, onwards by a retrospective amendment by Section 110 of the Finance Act, 2000. 16. I find force in the arguments raised by the learned SDR that the judgment of the Hon'ble High Court of Andhra Pradesh in th....