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2018 (1) TMI 764

of benefit on the ground that specified goods were cleared to the contractors of the project instead of the Project Authorities. - Whether the denial 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? - Held that: - The Hon’ble High Court in the case of The Commissioner of Central Excise Versus M/s. Caterpillar India Pvt. Ltd. [2013 (7) TMI 244 - MADRAS 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 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 .....

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ssioner Vs. Caterpillar India Pvt. Ltd. - 2016 (335) ELT A27 (S.C). iii) Alstom T & D (India) Ltd. Vs. CCE - 2016 (335) ELT 110 (Tri.-Chen.) iv) Sunbeam Generators Pvt. LTd. Vs. CCE - 2015-TIOL-1146-CESTAT-MAD v) M/s. Escorts Construction Equipment Ltd. Vs. CCE - 2017 (10) TMI 652-CESTAT Chandigarh vi) M/s. JCB India Ltd. Vs. CCE - 2017 (6) TMI-CESTAT Chandigarh vii) M/s. Escorts Construction Equipment Ltd. (ECEL Vs. CCE) - 2017 (1) TMI 1352 CESTAT Chandigarh. 2.2 The second ground is that as per Explanation 2 inserted w.e.f. 01.03.2008, in the Notification No. 108/1995, when the goods are withdrawn from the project site during the pendency of the project, the assessee would not be eligible for exemption. The department alleges that the impugned goods viz., concrete mixers have been withdrawn by appellant after completion of the project and thus not eligible for exemption. He submitted that Explanation 2 in the said notification seeks to deny the exemption benefit only when the goods are withdrawn during the tenure of the project and not otherwise.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 interpretat .....

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are used by the contractors for execution of the project who after completion of the project will become the owners of the said goods and would put the said goods for further deployment in other project. That in the present case, the appellant has withdrawn the capital goods after completion of the project and therefore the exemption has been rightly denied by the authorities below. To support his contention he relied upon the decision in the case of Bird Machines Vs. CCE, Delhi 2011 (263) ELT 82 (Tri.-Del.), that in the said case, the Division Bench of the Tribunal has held that withdrawal of machines even after completion of the project would disqualify for the exemption under the said notification. 4. Heard both sides. 5. The first issue is whether the denial 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 .....

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st in any supplier or contractor. First of all one has to understand that we are trying to interpret an explanation to a notification. It is settled law that the explanation cannot be construed beyond the scope of what is provided under the main provision itself. Explanation is added to any statutory provision to avoid any ambiguity arising out of the main statutory provision. The explanation cannot have existence independent of the main statutory provision. Being so, based on explanation itself, one is not entitled to enlarge the scope of the main notification more so, when the explanation is added to clarify what is stated in the main part of the notification. We find the clarification is in consonance with what we have expressed hereinabove. 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 sit .....

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