TMI Blog2008 (9) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... , Bangalore. 2. Shri K.S. Ravi Shankar, learned advocate appeared on behalf of the assessee and Ms. Joy Kumari Chander, learned JCDR for the revenue. 3. We heard both sides. The assessees are the manufacturers of motor vehicles and also the bodies and chassis. They cleared 298 motor vehicles to the Government of Gujarat and other relief agencies in the context of relief and rehabilitation of earthquake victims in the State of Gujarat availing exemption under Notification No. 2/2001 dt. 27-1-2001. Further, they had also reversed 8% of the value of these motor vehicles in the cenvat credit account in terms of Rule 57AD of the Central Excise Rules. Revenue proceeded against the appellants on the ground that during the relevant period, the intermediary products which have been manufactured by the assessee namely the chassis and the engines are not entitled for any exemption Notification. Since the intermediary products are not entitled for the exemption, they are liable to pay duty. That is the stand taken by the revenue. In fact, Notification No. 67/95 dated 16-3-1995 exempts intermediary products which are used in the manufacture of exempted final products. When the final pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CE - 2003 (160) E.L.T. 438 (Tri.-Bang.) Cement and clinker donated for earthquake relief and rehabilitation works is entitled for duty exemption under Notification No. 128/24-CE [para 5] 2. Associated. Cement Cos. Ltd. v. CCE -1999 (111) E.L.T. 257 (T Mad.) Affirmed in 2000 (116) E.L.T. A66 (S.C.) When substantive conditions of exemption notification are fulfilled, the benefit of exemption cannot be denied for inconsequential procedural condition. [paras 4 5] 3. Government of India v. Indian Tobacco Association - 2005 (187) E.L.T. 162 (S.C.) Exemption notification must be construed with regard to object and purport, which it seeks to achieve. Doctrine of fairness is a relevant factor to be considered while interpreting exemption notification. [paras 21 22] 4. HMM Ltd. v. CCE - 1996 (87) E.L.T. 593 (S.C.) Exemption notification not only to be construed strictly but also reasonably having regard to the language employed therein. [para 14] 5. Bombay Chemical Pvt. Ltd. v. CCE - 1995 (77) E.L.T. 3 (S.C.) Exemption notification to be strictly construed only when a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Earthquake in the State of Gujarat - Exemption from excise duty 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 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 under the First and Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) donated or purchased out of cash donations, for the relief and rehabilitation of the people affected by the earthquake in the State of Gujarat from the whole of the duty of excise leviable thereon under both the above mentioned Acts, subject to the following conditions, namely :- (i) that it is certified by the manufacturer of such goods on the relevant clearance documents that the goods are intended to be donated for the relief and rehabilitation of the people affected by the earthquake in the said State without making any charge therefore"; (ii) that the goods are sent directly from the factory of the manufacturer or warehouse to the Central Government, the Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act are exempted, even the intermediary products are included and there is no need in the context of this Notification for any separate Notification to exempt the intermediary products. 8.2 Let us take the case laws relied on by the learned advocate. For example, this Bench has decided similar issue in the case of Rajashree Cements (supra), wherein the impugned item was clinker and cement. There was similar Notification No. 128/94 which exempted goods donated for earthquake relief and rehabilitation from Central Excise duty. Revenue proceeded against the assessee when cement was donated. Cement has to be made from clinkers. A Show Cause Notice was issued asking by duty on clinker used in the manufacture of cement which was cleared under exemption should not be recovered, as the clinker was utilized by availing another Notification No. 217/86. The Deputy Commissioner confirmed demand of Rs. 8,79,567/-. When the matter came up before the Tribunal, this Bench held the view that even the clinker is exempted. The Tribunal relied on the decision of the Supreme Court in the case of HMM v. Ltd. v. Collector of Central Excise, New Delhi reported in 1996 (87) E.L.T. 593 (S.C.) where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 67/95-Central Excise, dated the 16th March 1995, namely:- In the said notification, for the proviso, the following proviso shall be substituted, namely:- "Provided that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final products which are exempt from the whole of the duty of excise leviable thereon or are chargeable to nil rate of duty, other than those goods which are cleared,- (i) to a unit in a Free Trade Zone, or (ii) to a hundred per cent Export Oriented Undertaking, or (iii) to a unit in an Electronic Hardware Technology Park, or (iv) to a unit in a Software Technology Park, or (v) under notification No. 108/95-Central Excise, dated the 28th August, 1995, or (vi) by a manufacturer of dutiable and exempted final products, after discharging the obligation prescribed in rule 57AD of the Central Excise Rules, 1944." 10.1 This Notification makes it very clear that captively consumed goods would be exempted even if the final products are exempted provided the ob ..... 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