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Commissioner of Central Excise Versus Customs Excise And Service Tax Appellate Tribunal, M/s. IBM India Limited

2016 (4) TMI 935 - MADRAS HIGH COURT

Whether the supply through a contractor to a project that comes within the purview of the Notification, could be construed as a supply - Goods cleared without payment of appropriate Central Excise Duty, in view of the exemption contained in Notification No.108/95 CE, dated 28.8.1995 - Held that:- the object of the Notification was to exempt all goods falling under the first Schedule to the Central Excise Tariff Act, 1985, when they are supplied to the United Nations or an International Organizat .....

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Department to contend, in some cases where the supply is made for the official use of International Organization that such supply should have been made directly. We are not saying this as an interpretation to the Notification, but indicating that at least if a case falls within the first limb, there is some possibility for the Department to take such a contention. - When a case falls under the second limb namely supply to the projects financed by the United Nations or an International Organ .....

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estion of law is answered against the Appellant/Revenue. - Whether the assessee could have produced certificates of exemption after clearance - Held that:- the Original Authority held this question in favour of the assessee. The Commissioner reversed the decision of the Original Authority not on this ground. Therefore, the finding of the Original Authority in this regard has attained finality. - Decided against the revenue - Civil Miscellaneous Appeal No. 2614 of 2008 - Dated:- 11-2-2016 - V .....

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n the goods werre not "supplied" either to the project or to the concerned International Organization funding the project but were supplied to the individual contractors who own these goods and not in any way under obligation to the "Project Authority" to use the goods in execution of the "Project"? 2. When the certificates were produced by the second respondent after clearance of the goods which is contrary to the conditions of the notification, whether first respo .....

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Central Excise Tariff Act, 1985. 4. The second respondent cleared 1676 personal computers valued at ₹ 5,17,46,000/- for a project known as "Second Health Systems Development Project" for implementation by the Government of West Bengal. Goods were cleared without payment of appropriate Central Excise Duty, in view of the exemption contained in Notification No.108/95 CE, dated 28.8.1995. 5. Contending that the exemption was wrongfully claimed by the second respondent assessee, the .....

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ation as required by Clause (a) of Explanation (1) to the Exemption Notification dated 28.8.1995; (iii) that the life span of the computers was around 6 years, but they may be used in the project only for one year or less, making the computers available for use for other purposes; (iv) that the computers were supplied not directly to the project but through intermediary by name "M/s. CMS Computers Limited, Kolkatta"; and (v) that the Exemption Certificates were not countersigned by the .....

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f the Department of Health and Family Welfare of the Government of West Bengal and hence the inference that the project was funded by the World Bank was inevitable; (ii) that the certificates have actually been countersigned by the Principal Secretary of the State of West Bengal, who was also holding the office as Principal Secretary, Health and Family Welfare Department, Government of West Bengal and there was no deviation; (iii) that the objections with regard to the life span of the personal .....

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pped further proceedings in the show cause notice, by his Order in Original. However, this Order in Original was later reviewed by another order dated 25.1.2006 in respect of a very small issue, about which we are not concerned. 8. However, the Department filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) allowed the appeal, on the only ground that the intended goods were not directly delivered to the Project Authorities but to an intermediary contractor. In other word .....

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l Excise, Mumbai [2004 (178) ELT 524] and SPIC Organics Ltd., v. Commissioner of Central Excise, Chennai vide Final Order No.1569/2005 dated 3.11.2005 in Appeal No.E/216/2001. Aggrieved by the said order, the Revenue is on appeal. 10. As we have indicated earlier, the appeal was admitted on two substantial questions of law. The first question revolves around the issue as to whether the supply through a contractor to a project that comes within the purview of the Notification, could be construed .....

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he Government of India. It is sufficient to extract the first portion of the Notification to appreciate this point. "In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise and Salt Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all goods falling .....

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tional Organization for their official use or (b) goods supplied to the projects financed by the United Nations or the International Organization and approved by the Government of India. 13. In other words, the supply made to the Organization indicated in the Notification for their official use as well as supply made to the projects financed by them, are both included within the purview of the Notification. It may be open, to the Department to contend, in some cases where the supply is made for .....

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be given by the Department that such supply should have been made directly to the projects. The project in this case was undertaken by the Government of West Bengal. It was financed by the International Development Association and the same was approved by the Government of India. Therefore, it is completely illogical to think even in cases covered by the second limb, that the supply should have been made directly. 15. To put it differently, the Department seeks to insert the word "directly .....

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.A.P.Srinivas, learned Senior Standing Counsel for the Department placed heavy reliance upon the decision of the Punjab and Haryana High Court in Dee Development Engineers Limited v. Union of India [2010 (254) ELT 412], in support of his contention that the goods ought to have been supplied directly to the project, to enable the assessee to claim the benefit of the Exemption Notification. 17. But with great respect, we find that in para 16 of its decision in Dee Development Engineers, the Punjab .....

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