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TMI Blog2023 (10) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.1995. Such clearances were made during the period from 19.03.2009 to 29.12.2011 under invoices, which were duly reflected in their ER-1 returns. 2.2 As the duty exemption under Notification No. 63/1995-CE dated 16.03.1995 is available only for the goods manufactured by HAL and other specified units and not for suppliers to HAL, a Show Cause Notice dated 12.09.2013 came to be issued for wrong availment of the exemption Notification benefit invoking extended period. After due process of adjudication, confirming the demand, interest and imposition of penalty vide Order-in-Original No. 4/2014 (CE) dated 25.03.2014 issued by the Commissioner of Central Excise, Chennai, the appellant came in appeal before this forum. 3.1 The main issue that is involved in this appeal is whether the appellant is eligible for the duty exemption benefit of Notification No. 63/1995-CE dated 16.03.1995 for their clearances of Armoured Panels and Stretcher Assembly to HAL, Bangalore. 3.2 Notification No. 63/1995-CE dated 16.03.1995 reads as follows:- "Goods for defence purposes or other projects In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excises and Salt Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xygen-free copper or beryllium copper falling under Chapter 74 If manufactured by the Defence Metallurgical Research Laboratory, Hyderabad out of copper supplied by the Hindustan Copper Limited. 8. Tools, jigs and fixtures falling under Chapter 82 If manufactured by Tool Rooms or Institutions specified below :- (i) Central Tool Room, Ludhiana. (ii) Central Tool Room and Training Centre, Calcutta. (iii) Central Institute of Tool Design, Hyderabad (iv) Institute for Designing of Electrical Measuring Instruments, Bombay (v) Central Institute of Hand Tools, Jallandhar (vi) Tool Room and Training Centre, Delhi (vii) Government Tool Room and Training Centre, Bangalore (viii) Institute of Training and Tool Room of Uttar Pradesh, Lucknow. 9. Motor vehicles, namely, BEML, Tatra Model 815 and BEML Tatra Model HDT-45 falling under Chapter 87 If manufactured by M/s. Bharat Earth Movers Limited for supply to the Government of India in the Ministry of Defence, for official purposes. 10. Assemblies and sub-assemblies If, - (i) for use in motor vehicles specified at S. No. 9 above, manufactured by M/s. Bharat Earth Movers Limited for supply to the Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o them as defined in clause (xiv) and clause (xxiii) of section 2 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985); (iv) "kits for testing narcotic drugs and psychotropic substances" means kits consisting of chemical reagents in small bottles for testing narcotic drugs and psychotropic substances manufactured by M/s. Hindustan Antibiotics Limited, Pimpri, including test tubes, droppers, test plates and similar other accessories supplied with such kits; (v) "Armed Forces of the Union" means the Central Reserve Police Force, the Indo-Tibetan Border Police Force, the Special Services Bureau, the Border Security Force, the Central Industrial Security Force and the National Security Guard maintained or constituted under the Central Reserve Police Force Act, 1949 (66 of 1949), the Indo-Tibetan Border Police Force Act, 1992 (35 of 1992), the Border Security Force Act, 1968 (47 of 1968), the Central Industrial Security Force Act, 1968 (50 of 1968) and the National Security Guard Act, 1986 (47 of 1986) respectively." 3.3 The above Notification allows exemption to all goods if manufactured by Hindustan Aeronautics Limited, Bharat Electronics Limited, Bharat Dynam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble High Court has interpreted the Circular dated 23.06.2006 in favor of the assessee and held that the assessee is eligible for the benefit of the exemption. 4.2 He has also referred to the decision rendered in the case of Commissioner of Central Excise Vs. Datasol Innovative Labs [2017 (349) ELT 13] by the Hon'ble High Court of Karnataka, allowing the exemption under Notification No. 63/1995-CE dated 16.03.1995 to the suppliers of HAL. In the said case, the Tribunal held that the assessee (Datasol) is eligible for the benefit of exemption on the basis of the certificate issued by CSIO /Aeronautical Development Agency. The issue of limitation was also held in favor of assessee. Against this, the Department approached the Hon'ble High Court of Karnataka. As per the decision reported in Commissioner of Central Excise, Bangalore Vs. Datasol Innovative Labs [2017 (349) ELT 13 (Kar.)], the Hon'ble High Court, though framed question of law on both issues, left the question on merits unanswered and rendered finding only on the issue of limitation. 4.3 The Ld. Advocate has adverted to the decision of the Hon'ble Apex Court in the case of Government of Kerala Vs. Mother Superior Adora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L to M/s. HAL and so on), though one unit specified in the notification list cannot be a job worker to another unit specified in the notification list, they are eligible for exemption under Notification No. 63/1995-CE upon satisfying the conditions which is not applicable in the appellant's case as it should not be understood to extend to the ancillary units, vendors, job workers or other units not specified in the Notification ibid. 5.3 Further, he has referred to the Final Order in the case of Astra Microwave Products Ltd. Vs. Commissioner of Customs and Central Excise, Hyderabad - IV [2016 342 ELT 300 (Tri. Hyd.)] by Tribunal, Hyderabad which held as follows:- "5. The Notification No. 63/95 clearly restricts the exemption in Serial No. 2 thereof only to manufacture of goods, inter alia, BEL for supply to Ministry of Defence for official purposes. There is no extension of this benefit to vendors or job workers. The appellant's argument that they started availing exemption after clarification by a departmental officer will not help their case. An erroneous clarification cannot be taken shelter of to claim erroneous benefit. Interestingly the appellant has also produced a letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1995. 7.3 A perusal of the exemption certificate will make it clear that, M/s. HAL, Bangalore, one of the specified units is to manufacture Advanced Light Helicopter (ALH) and supply to the Ministry of Defence for their official use. As various components or parts are required to be procured from other manufacturers / vendors, the DGM (Deputy General Manager) in charge of Helicopter Division had issued the above excise duty exemption certificate to the appellant wherein it was certified that the items being procured are required for the production of ALH and so are exempted from payment of excise duty leviable thereon under the impugned Notification. It has to be observed that the Notification is silent regarding legality or otherwise and the basis for issuance of this kind of excise duty exemption certificates by M/s. HAL as there is no specific mention about the authority, who has to issue this duty exemption certificate. A scrutiny of the relevant Notification indicates in respect of other entries, it is specifically mentioned who has to manufacture and where to be utilized. The entries at column Nos. 4 to 7 indicate that certain specified goods are to be manufactured by M/s. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 had held a similar issue in favor of assessee. Though the Department filed appeal against such order before the Hon'ble High Court of Karnataka, the Hon'ble High Court upheld the order of the Tribunal without rendering any finding on the question of law framed on merits of the case. 7.5.2 The facts of this case are that M/s. Datasol Innovative Labs is engaged in the manufacture of parts of aircrafts and helicopters and these were supplied to M/s. Hindustan Aeronautics Limited. By virtue of exemption Notification No. 184/86-CE dated 01.03.1986. The products which are manufactured by HAL if are supplied to the Ministry of Defence for official purposes are exempted. With regard to the above notification, the Central Board of Excise and Customs had issued a Circular and the relevant portion reads as follows:- "2. The purpose of Notification 184 of 86, manufactured by the five units listed in the said Notification, which are mainly engaged in production and supply of goods to the Ministry of Defence for official purposes, is very clear. When goods are manufactured by other ancillary units and sub-contractors for this purpose, and are sent back to the five units for further processi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms], dated 27-6-1992 referred to hereinabove shall be wiped off or nullified by the Notification dated 16-3-1995. As such, no intention either directly or indirectly to wipe out the effect of the Circular dated 27-6-1992 of the Central Board of [Excise & Customs] can be gathered. 14. In view of the above, if the language in the earlier Exemption Notification dated 1-3-1986 and the Exemption Notification dated 16-3-1995 were the same and the instructions issued by the Central Board of [Excise & Customs] would also co-relate. In any case, it cannot be said that there was any suppression or that there was any intention to evade the duty. 15. In view of the above, the finding recorded by the Tribunal on the aspects bona fide of the appellant therein/respondent herein and consequential non-availability of the limitation period of five years cannot be said to be perverse nor can be said to be erroneous. 16. Under the circumstances, the question No. 1 needs to be answered in the negative against the Revenue and in favour of the assessee, so far as the availability of the period of five years as the limitation period. 17. It has been stated by the learned counsel for the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his composite rule is not stated in any particular judgment in so many words. In fact, majority of judgments emphasise 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 judgments 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." 7.8 In the case of appellant, the goods viz., Armour Panels and Stretcher Assembly were supplied to M/s. Hindustan Aeronautics Ltd. [HAL], Bangalore for Advanced Light Helicopter (ALH) Project. These goods were cleared against the exemption certification issued by M/s. HAL. So, that interpretation which advances the object of the Notification i.e., ALH Project for Ministry of Defence use has to be adopted. The words "if manufactured by the following unit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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