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Commissioner of Central Excise, Raigad Versus M/s Wartsila (I) Pvt Ltd

2016 (3) TMI 662 - CESTAT MUMBAI

Exemption notification No. 64/95-CE - clearance of the goods to M/s. Mazgaon Dock which is meant for construction of Indian Navy warship - Held that:- The goods supplied should be used in the construction of warship of Indian Navy and a certificate from the Indian Navy should be produced to the Central Excise officer. In the said condition, it is no where mentioned that the goods has to be supplied to Indian Navy. Therefore, there is no dispute that the goods supplied to Mazgaon Dock for manufac .....

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ount to non-availment of credit. This view is supported by various judgments cited by the Ld. Counsel. Moreover as per the retrospective amendment made in Rule 6 vide Finance Act; the assessee is required to reverse the actual cenvat credit attributable to exempted goods. For this reason also the demand of 8% proposed in the SCN under Rule 6(3)(b) is not correct. We are therefore of the considered view that the order passed by the Ld. Commissioner is just and legal, which does not require any in .....

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of Central Excise, Raigad Commissionerate, wherein the Ld. Commissioner dropped the proceeding initiated under show cause notice No. V/(Cen)Adj/4-65/04-05 dated 09-09-2004 and No. V/Adj(SCN)15-70/RGD/05/7068 dated 06-10-2005. 2. The fact of the case is that the respondent in the month of October 2003 cleared D.G. Sets and parts thereof to M/s. Mazgaon Dock, Mumbai (A/c Indian Navy) at nil rate of central excise duty under the provisions of Notification No. 64/95-CE dated 16-03-1995 as amended b .....

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(SCN)15-70/RGD/ 05/7068 dated 06-10-2005 was also issued wherein it was alleged that the respondent instead of paying 8% of the exempted final product, they reversed the actual cenvat credit in respect of goods used for the manufacture of goods on which exemption notification No. 64/95-CE was availed and paid an amount of ₹ 23,97,567/-. In the adjudication, Ld. Commissioner dropped the demand of excise duty by allowing the exemption notification No. 64/95-CE and also dropped the demand of .....

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missible. He placed reliance on Hon'ble Supreme Court judgment in the case of Leader Engineering Works vs. Commr. of C.Ex., Chandigarh - 2007 (212) E.L.T. 168 (S.C.). As regard the demand under Rule 6(3)(b) of Cenvat Credit Rules, 2002, he submits that since the respondent has availed the cenvat credit on certain inputs which have been used in the exempted goods, the only option left is to pay 8% of the value of the exempted goods in terms of Rule 6(3)(b) and only reversal of actual credit w .....

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ubmits that the judgment of Leader Engineering Works (supra) is not relevant in the present case for the reason that the said judgment is in contest of exemption entry i.e. "All goods other than Cigarettes if supplied as store for consumption on board a vessel of the India Navy", whereas in the present case the exemption is covered under Entry No. 21 of the table of the Notification No. 64/95-CE dated 16-03-95 as amended vide Notification No. 25/2002-CE dated 11-04-2002. Therefore, the .....

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ts, the respondent is entitled for the exemption notification No. 64/95-CE. On the issue of the demand under Rule 6(3)(b), he submits that the respondent before the removal of exempted goods reversed the actual cenvat credit of inputs used in manufacture of exemption goods. Therefore, liability of 8% of the value of such goods does not arise. In this support, he placed reliance on the following judgments: (i) Rochees Watches Ltd. vs. Commr. of Customs, Jaipur - 2003 (152) E.L.T. 420 (Tri. - Del. .....

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e clearance of the goods to M/s. Mazgaon Dock which is meant for construction of Indian Navy warship. The relevant exemption entry which was in corporate vide Notification No. 25/2002-CE dated 11-04-2002 is reproduced below: "Goods supplied for use in construction of warships of the Indian Navy - Exemption - Amendment to Notification No. 64/95-C.E. In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of s .....

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llowing serial No. and entries shall be inserted, namely:- (1) (2) (3) "21. All goods. If,- (a) the said goods are supplied for use in construction of warships of the Indian Navy; and (b) before clearance of the said goods, a certificate from an officer not below the rank of a Rear Admiral of the Indian Navy or of any other officer of the Indian Navy equivalent to the Joint Secretary to the Government of India, to the effect that the said goods are intended for the said use, is produced to .....

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, therefore in our considered view there is no need that the goods should be supplied to Indian Navy only. The judgment of Hon'ble Supreme Court in the case of Leader Engineering Works (supra), it is not a case of supply of goods for construction of Indian Navy warship but it is in respect of goods supplied as stores for consumption on board a vessel of the Indian Navy. Therefore the fact of the present case is completely different from the fact of the judgment of Hon'ble Supreme Court. .....

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note of the circular issued by the Board in respect of Notification No. 184/86, which is precedent notification to Notification No. 63/95. In Circular vide F.No. 213/18/91-C.Ex.6, Circular No. 5/92, dated 19-5-1992 and another letter from Ministry of Finance F.No. IV/16/4/2003, dated 7-11-2003, it has been clarified that the exemption will be extended to all job workers and venders supplying inputs required by BEML for manufacture of finished goods supplied to Ministry of Defence. Tribunal had r .....

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l officers are not precluded from filing an appeal if the circular issued by the Board is contrary to the law. In this case, it is seen that the department is not in appeal. Further, the decision of Hon'ble Supreme Court in the case of Leader Engineering Works - 2007(212) E.L.T. 168 (S.C.) was in the case of exemption Notification No. 64/95, which is a totally different notification. 4. In view of the circular and letter from the Board and Ministry of Finance, we agree with the learned advoc .....

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dispute with regard to the receipt of the goods by the Indian Navy and they have issued certificate certifying about the receipt of the goods in respect of purchase orders placed by the Indian Navy to M/s. MDL and M/s. Western Indian Shipyard, Goa. We find from the citations referred to the appellant, that the Mumbai Bench in the case of Goa Paints and Allied Products v. CCE, Goa [2001 (127) E.L.T. 489] in identical facts and circumstances pertaining to the same Notification and supplies made to .....

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