2023 (5) TMI 327 - AT - Central Excise

Benefit of Exemption - Supply of goods to UN/International Organisations or Projects - N/N. 108/95-CE dated 28.08.1995 - appellant was not directly selling the goods to Project Implementation Authority but clearing to the contractor or subcontractor of PIA - denial of benefit of notification on the ground that the certificate extending the validity of the certificate as described by the notification has not been signed by the two officers as per the notification but only signed by the project director - HELD THAT - There are nothing in the notification which requires the extension of the original certificate issued as per the condition b(ii) above. It is also not in dispute that the goods have been used in the manner as prescribed. By bringing in condition of extension of the said certificate Commissioner has sought to insert certain conditions in the notification which do not exist. It is settled position in law that exemption notification needs to be interpreted according to the terms of the notification without any addition or deletion in the same. Reliance placed in the case of M/S. UTTAM INDUSTRIES VERSUS COMMNR. OF CENTRAL EXCISE HARYANA 2011 (2) TMI 4 - SUPREME COURT where it was held that Since the Tribunal and the authorities below have categorically held that the appellant does not satisfy the eligibility criteria on the basis of the evidence on record therefore we hold that the said exemption Notification is not applicable to the case of the appellants. Reliance can also be placed in the case of CC (PREVENTIVE) MUMBAI VERSUS M/S M. AMBALAL CO. 2010 (12) TMI 16 - SUPREME COURT where it was held that A construction which permits one to take advantage of one s own wrong or to impair one s own objections under a Statute should be disregarded. The interpretation should as far as possible be beneficial in the sense that it should suppress the mischief and advance the remedy without doing violence to the language. There are no merits in the impugned order and the same is set aside - appeal allowed.

Summary

Issues Involved:
1. Denial of exemption benefit under Notification No. 108/95-CE.
2. Validity of certificates issued by the Project Implementing Authority.
3. Extension of validity period of certificates.
4. Imposition of penalty and interest.

Summary:

1. Denial of exemption benefit under Notification No. 108/95-CE:
The appellant cleared goods by availing exemption under Notification No. 108/95-CE. The Commissioner demanded duty, arguing that the goods were supplied to contractors or subcontractors, not directly to the Project Implementation Authority (PIA), and the certificates were not countersigned as required. The Tribunal found that the goods were indeed supplied to projects funded by international organizations and used as intended. The Tribunal held that the benefit of exemption cannot be denied on technical grounds and cited the case of Auro Laboratories [2016 (344) ELT 391 (T)].

2. Validity of certificates issued by the Project Implementing Authority:
The Commissioner argued that certificates issued by the PIA were not countersigned by the Principal Secretary, making them invalid. The Tribunal noted that the certificates were issued by the Project Development Authorities and countersigned by the Principal Secretary of the respective states. The Tribunal found that the appellant fulfilled the conditions of the notification and was entitled to the benefit of the exemption, supported by various Tribunal decisions and Board Circular F.No.101/7/2008-CX-3 dated 12.6.2008.

3. Extension of validity period of certificates:
The Commissioner contended that the extension of the validity period of certificates by the Project Director was not authorized by the Principal Secretary, making the extensions invalid. The Tribunal found that the Project Director was authorized by the Chhattisgarh Government to issue revised technical acceptances. However, the Tribunal noted that the authorization dated 04.11.2011 could not be applied retrospectively to clearances made between 20.04.2007 and 31.01.2011. Thus, the Tribunal upheld the demand for the period where the validity extension was not countersigned by the Principal Secretary.

4. Imposition of penalty and interest:
The Tribunal emphasized that exemption notifications should be interpreted strictly according to their terms without adding conditions. The Tribunal relied on decisions from the Hon'ble Apex Court, including Uttam Industries [2011 (265) ELT 14 (SC)] and M. Ambalal & Co. [2010 (260) ELT 487 (SC)], which held that exemption notifications must be interpreted strictly and any procedural infirmities should not lead to denial of benefits. Consequently, the Tribunal set aside the impugned order and allowed the appeal.

Conclusion:
The Tribunal allowed the appeal, setting aside the impugned order, and held that the appellant was entitled to the benefit of exemption under Notification No. 108/95-CE. The Tribunal emphasized the need for strict interpretation of exemption notifications and found no merit in the Commissioner's order.