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2023 (10) TMI 1083
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....of Notification No. 63/1995-CE dated 16.03.1995. Such clearances were made during the period from 19.03.2009 to 29.12.2011 under invoices, which were duly reflected in their ER-1 returns. 2.2 As the duty exemption under Notification No. 63/1995-CE dated 16.03.1995 is available only for the goods manufactured by HAL and other specified units and not for suppliers to HAL, a Show Cause Notice dated 12.09.2013 came to be issued for wrong availment of the exemption Notification benefit invoking extended period. After due process of adjudication, confirming the demand, interest and imposition of penalty vide Order-in-Original No. 4/2014 (CE) dated 25.03.2014 issued by the Commissioner of Central Excise, Chennai, the appellant came in appeal before this forum. 3.1 The main issue that is involved in this appeal is whether the appellant is eligible for the duty exemption benefit of Notification No. 63/1995-CE dated 16.03.1995 for their clearances of Armoured Panels and Stretcher Assembly to HAL, Bangalore. 3.2 Notification No. 63/1995-CE dated 16.03.1995 reads as follows:- "Goods for defence purposes or other projects In exercise of the powers conferred by sub-sec....
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....heading Nos. 7318.00, 7415.32, 7616.10 or 7907.00 If manufactured by the Hindustan Aeronautics Limited, and used within their units for the manufacture of aircrafts or as spare parts of aircrafts. 7. Billets, rods and sheets, of oxygen-free copper or beryllium copper falling under Chapter 74 If manufactured by the Defence Metallurgical Research Laboratory, Hyderabad out of copper supplied by the Hindustan Copper Limited. 8. Tools, jigs and fixtures falling under Chapter 82 If manufactured by Tool Rooms or Institutions specified below :- (i) Central Tool Room, Ludhiana. (ii) Central Tool Room and Training Centre, Calcutta. (iii) Central Institute of Tool Design, Hyderabad (iv) Institute for Designing of Electrical Measuring Instruments, Bombay (v) Central Institute of Hand Tools, Jallandhar (vi) Tool Room and Training Centre, Delhi (vii) Government Tool Room and Training Centre, Bangalore (viii) Institute of Training and Tool Room of Uttar Pradesh, Lucknow. 9. Motor vehicles, namely, BEML, Tatra Model 815 and BEML Tatra Model HDT-45 falling under Chapter 87 ....
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....nt for the detention of prisoners and includes, - (a) any place which has been declared by a State Government by general or special order to be a subsidiary jail; and (b) any reformatory, borstal institution or other insitution of a like nature; (ii) "mine" has the meaning assigned to it in clause (j) of section 2 of the Mines Act, 1952 (35 of 1952); (iii) "narcotic drugs" and "psychotropic substance" shall have the meanings respectively assigned to them as defined in clause (xiv) and clause (xxiii) of section 2 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985); (iv) "kits for testing narcotic drugs and psychotropic substances" means kits consisting of chemical reagents in small bottles for testing narcotic drugs and psychotropic substances manufactured by M/s. Hindustan Antibiotics Limited, Pimpri, including test tubes, droppers, test plates and similar other accessories supplied with such kits; (v) "Armed Forces of the Union" means the Central Reserve Police Force, the Indo-Tibetan Border Police Force, the Special Services Bureau, the Border Security Force, the Central Industrial Security Force and the N....
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....e manufactured by any ancillary units or sub-contractors on job work basis, the Notification benefit would be available. As in this case, the appellant has manufactured the goods independently and have not complied with the job work procedure, the benefit of Notification was sought to be denied. 4.1 The Ld. Advocate Shri S. Durairaj representing the appellant has submitted that the order of the Tribunal Delhi in the case of National Engineering Industries Ltd. (supra) was reversed by the Hon'ble Rajasthan High Court wherein the Hon'ble High Court has interpreted the Circular dated 23.06.2006 in favor of the assessee and held that the assessee is eligible for the benefit of the exemption. 4.2 He has also referred to the decision rendered in the case of Commissioner of Central Excise Vs. Datasol Innovative Labs [2017 (349) ELT 13] by the Hon'ble High Court of Karnataka, allowing the exemption under Notification No. 63/1995-CE dated 16.03.1995 to the suppliers of HAL. In the said case, the Tribunal held that the assessee (Datasol) is eligible for the benefit of exemption on the basis of the certificate issued by CSIO /Aeronautical Development Agency. The issue of limitation was ....
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....e units are covered under the said Notification and goods are ultimately supplied for use by Ministry of Defence. Whereas, in the instant case, the appellant has supplied the goods to HAL which is a specified unit but not the appellant. 5.2 He has argued that the clarification only answers that if both the units are covered under the said notification and if the goods manufactured by the first unit that is specified in the notification list are supplied to the second unit specified in the notification list (Eg. M/s. BEML to M/s. HAL, M/s. BEL to M/s. HAL and so on), though one unit specified in the notification list cannot be a job worker to another unit specified in the notification list, they are eligible for exemption under Notification No. 63/1995-CE upon satisfying the conditions which is not applicable in the appellant's case as it should not be understood to extend to the ancillary units, vendors, job workers or other units not specified in the Notification ibid. 5.3 Further, he has referred to the Final Order in the case of Astra Microwave Products Ltd. Vs. Commissioner of Customs and Central Excise, Hyderabad - IV [2016 342 ELT 300 (Tri. Hyd.)] by Tribunal, Hyderabad....
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....1995. For clarity, a copy of the excise duty exemption certificate issued by HAL Helicopter Division, Bangalore to the appellants is extracted below:- 7.2 This exemption certificate clearly indicates (i) name and address of the supplier (ii) description of the goods to be manufactured and supplied (iii) the items that are required for the production of Advanced Light Helicopter (ALH) against the order of Ministry of Defence, Government of India, and, (iv) these goods are exempted from payment of excise duty leviable under Notification No. 63/1995-CE dated 16.03.1995. 7.3 A perusal of the exemption certificate will make it clear that, M/s. HAL, Bangalore, one of the specified units is to manufacture Advanced Light Helicopter (ALH) and supply to the Ministry of Defence for their official use. As various components or parts are required to be procured from other manufacturers / vendors, the DGM (Deputy General Manager) in charge of Helicopter Division had issued the above excise duty exemption certificate to the appellant wherein it was certified that the items being procured are required for the production of ALH and so are exempted from payment of excise duty leviable thereon ....
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....consideration the notification of 2006 which squarely covered the case of the appellant and in view of certificate issued by competent authority, the appellant is entitled for the benefit." 7.4.3 Thus, the Hon'ble High Court of Rajasthan has reversed the decision of the Tribunal in the case of National Engineering Ind. Ltd. (supra) which was relied upon for denial of the exemption benefit of the Notification (supra) by the adjudicating authority. 7.5.1 Further in the case of Datasol Innovative Labs Vs. Commissioner of Central Excise, Bangalore, the Tribunal vide F.O. dated 08.02.2017 had held a similar issue in favor of assessee. Though the Department filed appeal against such order before the Hon'ble High Court of Karnataka, the Hon'ble High Court upheld the order of the Tribunal without rendering any finding on the question of law framed on merits of the case. 7.5.2 The facts of this case are that M/s. Datasol Innovative Labs is engaged in the manufacture of parts of aircrafts and helicopters and these were supplied to M/s. Hindustan Aeronautics Limited. By virtue of exemption Notification No. 184/86-CE dated 01.03.1986. The products which are manufactured by HAL if are ....
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....er ancillary units and other contractors for this purpose are sent to the units for which the exemption is available, there is no reason for denying them the benefit of exemption. Under these circumstances, the contention raised that the intention to evade duty cannot be accepted. 13. In our view, if there was change in the language of the Notification dated 16-3-1995, possibly the matter m ay stand on a different footing and different consideration. But when the very language is kept intact and there is only addition in the number of units, it cannot be said that the clarification of the Central Board of [Excise & Customs], dated 27-6-1992 referred to hereinabove shall be wiped off or nullified by the Notification dated 16-3-1995. As such, no intention either directly or indirectly to wipe out the effect of the Circular dated 27-6-1992 of the Central Board of [Excise & Customs] can be gathered. 14. In view of the above, if the language in the earlier Exemption Notification dated 1-3-1986 and the Exemption Notification dated 16-3-1995 were the same and the instructions issued by the Central Board of [Excise & Customs] would also co-relate. In any case, it cannot b....
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....E.L.T. 487 (S.C.) made a clear distinction between exemptions which are to be strictly interpreted as opposed to beneficial exemptions having as their purpose - encouragement or promotion of certain activities. This case felicitously put the law thus follows : "16. It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many words. In fact, majority of judgments emphasise that exemptions are to be strictly interpreted while some of them insist that exemptions in fiscal statutes are to be liberally interpreted giving an apparent impression that they are contradictory to each other. But this is only apparent. A close scrutiny will reveal that there is no real contradiction amongst the judgments at all. The synthesis of the views is quite clearly t....