TMI Blog2018 (1) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... - the denial of exemption benefit on the ground that the goods were cleared to contractors cannot sustain. Denial of exemption on the basis of Explanation 2 inserted in N/N. 108/1995-CE w.e.f. 01.03.2008 - Held that: - 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to deny exemption by interpreting Explanation 2 to the effect that the exemption is not available if the goods are withdrawn from project site. Denial of exemption is unjustified - appeal allowed. - E/40732-40734/2013 - Final Order No.40094-40096/2018 - Dated:- 10-1-2018 - Ms. Sulekha Beevi, Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri Raghavan Ramabadran, Advocate for the Appellant Shri B. Balamurugan, AC (AR) for the Respondent ORDER Per Bench The appellants are engaged in the manufacture of concrete mixer, pumps and concrete batching plant . They made supplies to projects financed by the World Bank, Asian Development Bank or International Organization approved by the Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mixers have been withdrawn by appellant after completion of the project and thus not eligible for exemption. He submitted that Explanation 2 in the said notification seeks to deny the exemption benefit only when the goods are withdrawn during the tenure of the project and not otherwise.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 withdrawl even after completion of the project. This interpretation is highly erroneous. The department has incorrectly interpreted the word withdraw to refer to the time period even after completion of the project. In this regard, he placed reliance on the Explanatory Notes to the Budget changes 2008-09. As per Sl.No. 3 under miscellaneous Changes it is stated that the Explanation has been inserted in the Notification, to reflect the intention that the benefit of the exemption is not available for goods supplied to a project for temporary use . It is clear that the Explanation seeks to deny the benefit to goods which are withdrawn during the currency of the project. The goods supplied by the appellant to the contractors are used in the approved projects for the total duration of the project. The department does not allege that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 Vs. 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. 108/1995 dated 28.08.1995 to the contractors executing Golden Quadrilateral Road Project financed by the United Nations and International Organization claiming exemption from duty. The Hon ble High Court held that the use of the phrase supply to the projects financed by United nations or International Organization and approved by the Government of India clearly shows that the condition for grant of exemption is supply of the goods towards the project. That since the conditions are satisfied, the benefit of exempton cannot be denied stating that the goods were supplied to the contractor. The Hon ble Apex Court has affirmed the said decision. Similar view was taken by the jurisdictional High Court and Tribunal in the decisions relied by the appellants and ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above. 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 project site, from where such goods cannot be withdrawn by the contractor even after completion of the project work. In other words, he cannot claim any ownership right over such goods. 8. In the Bird Machines case, the main issue was whether the exemption is available when the goods are supplied to the Contractors. The Hon ble Apex Court vide judgment reported in 2016 (335) ELT 827 (S.C) subsequently has affirmed the decision of the jurisdictional High Court in Caterpillar India (P) Ltd. (supra). Therefore the decision given in Bird Machines being prior to the judgment of Hon ble Apex Court is no longer a good law and cannot be relied upon. The jurisdictional High Court in the case of CCE, Pondicherry Vs. CESTAT, Chennai - 2016 (335) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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