TMI Blog2023 (7) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... nd hence they fulfilled the condition stipulated in the Notification 108/95 dated 28.08.95, to avail the exemption. The Appellant stated that after introduction of Explanation 2 to the Notification, CBEC issued clarification vide Circular dated 12.06.2008, which has added words to the Notification which were not there. As per the Circular, the exemption is applicable to goods which form part of the project on permanent basis and not to goods which are used for execution of the project and after completion of the project remain with the contractors, for further deployment in other projects. This interpretation has not been envisaged in the Explanation2 - the department has interpreted the Explanation 2 wrongly. The Explanation 2 would only mean that the goods brought into the project should not be withdrawn by the contractor during the course of execution of the project. After the project is completed the contractor is well within his right to withdraw the capital goods and machinery used in execution of the project, since it does not form part of the structure of the project. This view has been taken by the Tribunal in the case of M/S. SCHWING STETTER (I) PVT. LTD. VERSUS CCE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equired for execution of the projects financed by international organizations like World Bank, Asian Development Bank etc. To claim exemption, the manufacturer has to obtain a certificate from the head of the Project Implementing Authority, countersigned by an officer not below the rank of Joint Secretary to the Government of India or Principal Secretary or Secretary to the State Government, to the effect that the goods are required for execution of the project which has been approved by the Government of India. 6. Explanation 2 was inserted in the Exemption Notification with effect from 01.03.2008, which is reproduced below: [Explanation 2. For the removal of doubts, it is hereby clarified that the benefit under this notification, in the case of goods supplied to the projects financed by the United Nations or an international organization, is available when the goods brought into the project are not withdrawn by the supplier or contractor and the expression goods are required for the execution of the project shall be construed accordingly.] 7. The Appellant stated that the goods supplied are required for execution of the project, as is evident from the certificate i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tary to the Govt. of India. 9. As per the above mentioned Circular, the exemption is applicable to goods which form part of the project on permanent basis and not to the goods which are used for execution of the project and after completion of the project remain with the contractors, for further deployment in other projects. The appellant stated that this interpretation has gone beyond the mandate of the Notification. 10. The Appellant stated that the dispute has been settled by the Tribunal in the case of Schwing Stetter (I) Pvt. Ltd Vs CCE ST.LTU,Chennai-2018(364) ELT 653 (Tri.-Chennai) which is squarely applicable to the facts of the instant case. Accordingly, they contended that the demands confirmed in the impugned order are not sustainable. 11. The Ld. Departmental Representative reiterated the findings of the adjudicating authority in the impugned order and stated that the Appellant was not eligible for the benefit of the Exemption Notification as per the clarification given by the Circular dated 12.06.2008. 12. Heard both sides and perused the Appeal records. 13. The issue involved in the present appeal is with respect to eligibility of benefit of the Exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contractor during the course of execution of the project. After the project is completed and if the contractor shifts the capital goods to some other project, then the exemption cannot be denied. 16. We find that this view has been taken by the Tribunal in the case of Schwing Setter (I) Pvt. Ltd Vs CCE ST.LTU,Chennai-2018(364) ELT 653 (Tri.-Chennai). The relevant portion of the order is reproduced below: 2.2 The second ground is that as per Explanation 2 inserted w.e.f. 1-3-2008, in the Notification No. 108/95, when the 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 withdrawal even after completion of the project. This interpretation is highly erroneous. The department has incorr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the project who after completion of the project will become the owners of the said goods and would put the said goods for further deployment in other project. That in the present case, the appellant has withdrawn the capital goods after completion of the project and therefore the exemption has been rightly denied by the authorities below. To support his contention he relied upon the decision in the case of Bird Machines v. CCE, Delhi - 2011 (263) E.L.T. 82 (Tri.-Del.), that in the said case, the Division Bench of the Tribunal has held that withdrawal of machines even after completion of the project would disqualify for the exemption under the said notification. 4. Heard both sides. 5. The first issue is whether the denial of exemption on the ground that the impugned goods are supplied to the contractor of the project instead of the Project Authorities is correct or not. This issue was considered by the jurisdictional High Court in the case of CCE, Pondicherry v. Caterpillar India Pvt. Ltd. (supra). The respondent in the said case was a manufacturer of variety of earth moving equipments and these products were cleared under the Notification No. 108/95, dated 28-8-1995 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can vest in any supplier or contractor. First of all one has to understand that we are trying to interpret an 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 prescribed against the withdrawal is at a stage after clearance of the goods for the project and on arrival of the goods at the project site. Prohibition of withdrawal is from the project site. But arrival of goods at the site by availing benefit under the notification has to be on supply of such goods to the project for the use at the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d mean supply to Project Authority as stated in the Notification. The department cannot then interpret the Explanation inserted in the Notification to restrict the exemption only to goods which form part of project on permanent basis. The appellant has complied with the condition of furnishing certificate of designated authorities. The department allowed clearance of the goods without any murmur on the validity of the certificate. The department cannot later turn around to deny exemption by interpreting Explanation 2 to the effect that the exemption is not available if the goods are withdrawn from project site. The Contractor would not be able to retain the capital goods in the project site after completion of the project and the interpretation of Explanation 2 by the Department in this angle does not find favour with us. 9. From the discussions made above and following the law laid in the above decisions, we are of the view that the denial of exemption is unjustified. The impugned order is set aside. The appeals are allowed with consequential reliefs, if any . 17. The decision of the Tribunal cited above clearly supports the view of the appellant. Thus, we hold that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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