2007 (7) TMI 114 - AT - Central Excise

Exemption - Issue arises regarding applicability of benefit of Ntf. No.10/97- C.E. Ntf. No. 3/2001 and Cenvat credit - Appellant is entitle for benefit of Ntf. No. 10/97-C.E. in respect to transformers cleared to research centre and also entitle for Cenvat credit but not entitle for Ntf. No. 3/97

Summary

Issues:
1. Benefit of Notification No. 10/97-C.E. for transformers supplied to Bhabha Atomic Research Centre.
2. Benefit of Notification No. 3/2001-C.E. for transformers supplied as parts of Biogas Plant and Bio-gas Engine.

Analysis:

Issue 1:
The appellant claimed the benefit of Notification No. 10/97-C.E. for transformers supplied to Bhabha Atomic Research Centre. The lower authorities objected, stating that transformers do not qualify as scientific or technical equipment as they do not participate in research work. However, the Tribunal referred to the precedent set in the case of Andrew Yule & Co. Ltd. v. C.C.E., Chennai, where it was established that transformers working on scientific principles fall under scientific equipment. Additionally, in the case of Danke Products v. CCE, Vadodara II, it was held that the benefit of the notification cannot be denied when the transformer is in use by an accredited Research Institute of Atomic Energy. Consequently, the Tribunal extended the benefit of Notification No. 10/97-C.E. to the transformers supplied to the Research Centre, ruling in favor of the appellant.

Issue 2:
Regarding the benefit of Notification No. 3/2001-C.E. for transformers supplied as parts of Biogas Plant and Bio-gas Engine, the Commissioner (Appeals) denied the benefit to the appellant. The Commissioner noted that the exemption under the notification applies only to the plant and engine, not to parts like transformers. The Tribunal concurred, stating that transformers cannot be classified as a plant or engine but may be considered parts of the plant. Since the notification specifically exempts the plant and engine, the scope cannot be extended to include transformers. Consequently, the Tribunal rejected the appellant's claim for the benefit of Notification No. 3/2001. The appellant requested the restoration of Modvat credit since the goods were cleared without duty payment, which the Tribunal agreed to, directing the jurisdictional authorities to restore the credit and confirm duty on the final product, i.e., transformers cleared under the said Notification.

In conclusion, the Tribunal disposed of the appeal by granting the benefit of Notification No. 10/97-C.E. to transformers supplied to Bhabha Atomic Research Centre but rejecting the claim for the benefit of Notification No. 3/2001 for transformers supplied as parts of Biogas Plant and Bio-gas Engine.