TMI Blog2023 (5) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... aced 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. - Excise Appeal No. 85939 of 2013 - FINAL ORDER NO. 85488/2023 - Dated:- 14-3-2023 - HON BLE MR. SANJIV SRIVASTAVA , MEMBER ( TECHNICAL ) And HON BLE DR. SUVENDU KUMAR PATI , MEMBER ( JUDICIAL ) Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Cess and higher secondary education Cess amounting to Rs.4,06,35,151/- (Rupees Four Crores Six Lakhs Thirty Five Thousand One Hundred Fifty One only) calculated in Annexure C read with Annexure A-1 to A-6, and inclusive of duty of Rs.1,02,22,129/- (One Crores Two Lakhs Twenty Two Thousand One Hundred Twenty Nine) on the clearances mentioned in Annexure B, should not be demanded and recovered from them on the aforesaid clearances of their goods cleared under Notification No.108/95- CE. dated 28.08.1995 as amended, from 1st July, 2006 to 30th June, 2011 under proviso to Section 11 A/ subsection (5) of Section 11A, (w.e.f 08.04.2011) of the Central Excise Act; b) penalty under Section 11 AC for the period 01.07.2006 to 07.04.2011 and under sub-section (5) of Section 11 AC w.e.f 08.04.2011, should not be imposed on them; c) interest as applicable should not be demanded and recovered from them under the provisions of the erstwhile Section 11AB/ 11 AA, of the Central Excise Act, 1944. 2.2 This show cause notice has been adjudicated as per the impugned order. Aggrieved appellant has filed this appeal. 3.1 We have heard Shri Rajesh Ostwal, Advocate for the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to demand duty on the goods supplied by the assessee by availing the exemption notification No. 108/95 dated 28.08.95. 25. In their reply, the assessee stated that, the projects have been approved by the Government of India and the goods supplied by them were actually used in the projects. The certificates issued by the Project Authority clearly certifies that the said goods supplied to the assessee were intended for use in the project. Further, the certificates issued are countersigned by the Principal Secretary of the State Governments concerned with the projects. Hence, they argued that the certificates were valid and they were entitled to avail the exemption provided under Notification No. 108/95 dated 28.08.95. 26. I find that notification No. 108/95 dtd 28.08.95 exempts goods cleared to projects funded by UN or specified International Organizations. The conditions for availing the exemption, provided in the said notification is that, the assessee should produce a certificate from the Project Implementing Authority certifying that the goods are required for the projects funded by such International Organizations. In this case the Road Development Projects have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal cited by them supports the case of the assessee. For reference, I reproduce the relevant portion of the decisions of the Hon'ble Tribunal in the case of M/s. Caterpillar India Pvt. Ltd v. CCR- 2005(185)ELT 430(T) wherein, the Hon'ble tribunal has hell as under: 3. It is not the case of the Department that the goods have not been supplied to the Projects financed by the International Organisations. The goods were supplied to various sub contractors for the Golden Quadrilateral Project financed by Asian Development Bank. Goods have also been used for the project. The notification nowhere stipulates that the excisable goods supplied should be directly paid for by the organization financing the project. Since the goods have admittedly been used for the project, the question of misuse of goods for unintended purposes, as noted by the Commissioner, does not arise. The fact that after the projects are implemented, the subcontractors are entitled to retain the goods supplied to them under the notification cannot result in denial of benefit of exemption under the notification to the appellants. We are supported in our view by the Larger Bench decision of the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f suppliers of the materials. 29. The assessee have also cited Board Circular F.No.101/7/2008-CX-3 dated 12.6.2008 wherein certain clarifications have been issued regarding the availability of the benefit of Notification 108/95-CE dated 28.08.95, to capital goods. The relevant portion of the clarification is reproduced below: Therefore, it is clarified that the exemption is meant only for the goods which become part of the project on permanent basis and not for the goods which are used by the contractors for execution of the project and after completion of the project, the goods remain with the contractors being owners of such goods for further deployment in other projects . I find that the decisions of the Hon'ble Tribunal cited above supports the case of the assessee. I also find that as per the clarification of Board cited above the benefit of the Notification 108/95 would be available to the inputs which became part of the project. Only the capital goods which can be used further after completion of the project would not be entitled for the benefit under the said Notification. As the goods supplied by the assessee are inputs which has been used in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No. 108/95 dated 28.08.95. 32. The next point raised in the SCN is that the extension of the validity period of the certificate issued in the case of projects implemented by the Chattishgarh Government. It is alleged that the extension validity certificates has been countersigned by the Project Director and not by the Principal Secretary and hence the extension granted was not valid. I find that this issue pertains only to the projects implemented by the Chattishgarh Government, wherein the Project Director has extended the validity. In their reply, the assessee stated that the Project Director has been authorised for issuing the extension certificates by the concerned State Governments and hence the extension granted by the Project Director is valid. At the time of personal hearing they were asked to produce the copies of relevant authorization given by the Chhattishgarh State Government to the Project Director for countersigning the extension. Accordingly they have produced a letter dated 4.11.2011 issued by Chhattisgarh Government the contents of which are reproduced below: According to the proposal brought by the Note, the Project Director is authorized to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iated. In respect of these clearances listed in Annexure-B to the SCN, there was no valid certificate issued by the competent authority specified available at the time of clearance. The extension granted by the Project Director cannot be considered as validating the certificate issued earlier by the Principal Secretary of the state Government or Secretary (Finance). The evidence produced by the assessee vide letter dated 04.11.11, has not specifically authorized the Project Director to extend the validity of the certificate earlier issued by the competent authority. Further, I find that the authorisation submitted by the assessee was a letter dated 04.11.2011 whereas the clearances were effected during the period from 20.04.0007 to 31.01.2011. Hence, the authorisation dated 04.11.2011 can not be made applicable retrospectively for the period in which the goods were cleared based on the validity extended by the Project Director. Thus, I find that during the period from 20.04.0007 to 31.01.2011, the extension of validity of certificates issued by the Project Director was without authorization. Hence, I hold that the certificates whose validity has been extended by the Project Directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government of India for implementation by the Government of a State or a Union Territory, a certificate from the executive head of the Project Implementing Authority and countersigned by the Principal Secretary or the Secretary (Finance), as the case may be, in the concerned State Government or the Union Territory, that the said goods are required for the execution of the said project, and that the said project has duly been approved by the Government of India for implementation by the concerned State Government. ; (ii) for the Explanation, the following shall be substituted, namely :- Explanation. 1 - For the purposes of this notification,- (a) international organisation means an international organisation to which the Central Government has declared, in pursuance of section 3 of the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), that the provisions of the Schedule to the said Act shall apply; (b) Line Ministry means a Ministry in the Government of India, which has been so nominated with respect to a project, by the Government of India, in the Ministry of Finance (Department of Economic Affairs). Explanation 2. For the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many words. In fact, majority of judgements emphasize that exemptions are to be strictly interpreted while some of them insist that exemptions in fiscal Statutes are to be liberally interpreted giving an apparent impression that they are contradictory to each other. But this is only apparent. A close scrutiny will reveal that there is no real contradiction amongst the judgements at all. The synthesis of the views is quite clearly that the general rule is strict interpretation while special rule in the case of beneficial and promotional exemption is liberal interpretation. The two go very well with each other because they relate to two different sets of circumstances. 11. The notification issued by the Central Government in exercise of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank intended for a noble cause. In the case of Eagle Flask Industries, there was a condition of filing a declaration/an undertaking which was so basic and not complied with. In the instant case, there has been substantial compliance with the notification barring the absence of countersignature by an officer not below the rank of a Joint Secretary. With regard to the third case law viz. M/s. Sterlite Industries, which was a case wherein the exemption was under Notification No. 108/95 but the reason for which the exemption was denied, was failure to establish that the condition precedent was satisfied and the said condition being a certificate issued in terms of para (c)(ii) by the implementing authority can be of no avail as the said authority was indeed empowered to issue a certificate, if the project is financed by an International Organization. This case also does not support the Revenue as in the instant case there has been a certificate with the only infirmity being non-countersigned. 4.7 In the case of Engineering Innovations Ltd. [2009 (242) ELT 153 (T)] Tribunal has held as follows:- 4. We have considered the submissions. We agree with the appellant s contention ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
