2018 (1) TMI 764

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....approved by the Government of India, availing exemption from excise duty under Notification No. 108/1995-CE dated 28.08.1995. SCNs were issued alleging that the benefit of notification was not available to the appellants on the following grounds:- a) The specified goods were cleared to the contractors of the project instead of the Project Authorities. b) The exemption would be applicable only for such goods which become part of the project on permanent basis and not for those which are used by the contractors for execution of the project, who after completion of the project will remain to be owners of the said goods and would put the said goods for further deployment in other projects. After adjudication, the original a....

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....e goods are withdrawn from the project site during the pendency of the project, the assessee would not be eligible for exemption. The department alleges that the impugned goods viz., concrete mixers have been withdrawn by appellant after completion of the project and thus not eligible for exemption. He submitted that Explanation 2 in the said notification seeks to deny the exemption benefit only when the goods are withdrawn during the tenure of the project and not otherwise. The department has interpreted this Explanation to extend the work withdrawl even after completion of the project. This interpretation is highly erroneous. The department has incorrectly interpreted the word withdraw to refer to the time period even after completion of ....

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....ly to those goods which are consumed in the project or become part of the project on a permanent basis is incorrect. The authorities below have denied the exemption by incorrectly interpreting the above said Explanation 2 inserted in Notification No. 13/2008 dated 01.03.2008. He pleaded that the appeal may be allowed. 3. The Ld. AR, B. Balamurugan supported the findings in the impugned order. He adverted to Explanation 2 of the Notification and submitted that the benefit of the Notification is available only when the goods brought into the project are not withdrawn by the supplier or contractor. The exemption would be applicable only for such goods which become part of the project on permanent basis (eg: cement and steel etc.) and not fo....

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....d nations or International Organization and approved by the Government of India clearly shows that the condition for grant of exemption is supply of the goods towards the project. That since the conditions are satisfied, the benefit of exempton cannot be denied stating that the goods were supplied to the contractor. The Hon'ble Apex Court has affirmed the said decision. Similar view was taken by the jurisdictional High Court and Tribunal in the decisions relied by the appellants and cited supra. Following the same, we are of the view that the denial of exemption benefit on the ground that the goods were cleared to contractors cannot sustain. 6. The second issue is with regard to the denial of exemption on the basis of Explanation 2 inser....

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.... explanation to a notification. It is settled law that the explanation cannot be construed beyond the scope of what is provided under the main provision itself. Explanation is added to any statutory provision to avoid any ambiguity arising out of the main statutory provision. The explanation cannot have existence independent of the main statutory provision. Being so, based on explanation itself, one is not entitled to enlarge the scope of the main notification more so, when the explanation is added to clarify what is stated in the main part of the notification. We find the clarification is in consonance with what we have expressed hereinabove. The explanation in question merely makes the position more explicit as discussed above. The bar pr....

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.... that benefit is available only when the goods are supplied to the project for the use at the project site. The Ld. AR has laid much thrust on the last two sentences in this para. In our view this is only a passing observation and does not lay down the ratio of the case. In other words, the issue agitated in the said case was not whether the exemption under the notification would be available if the goods are withdrawn after the completion of the project. Being only obiter dicta the same does not have precedential value. This apart, to compel the contractor that the capital goods used in the project cannot be withdrawn even after completion of the project would be highly impractical and impossible. The law does not compel a man to do that w....