M/S. National Engg. Industries Ltd vs C.C.E & S.T. Jaipur-I

[Arising out of Order-in-Appeal No. 218/GRM/CE/JPR-I/2006 dated 31.08.2006 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Jaipur].

For approval and signature:

Honble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. National Engg. Industries Ltd. .Appellants

Vs.

C.C.E & S.T. Jaipur-I .Respondent

Appearance:

Shri Mayank Garg, Advocate for the Appellant

Shri Govind Dixit, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

Date of Hearing: 04.09.2015

FINAL ORDER NO. 52835/2015-EX(DB)

Per Ashok Jindal:

The appellant is in appeal against the impugned order denying benefit of notification no. 64/95-CE dated 16.03.1995.

2. The facts of the case are that appellant is manufacturer of various types of bearings and they have cleared the said bearing to M/s. Saxena Marine Tech (P) Ltd., Ghaziabad by availing exemption under notification no. 64/95-CE dated 16.03.1995. An audit was conducted in the premises of the appellant. During the period March 2005-April 2005 it was noticed that there is no certificate issued by the competent authority in the name of the assessees unit for the said period for availing benefit under notification no. 64/95 (Sl. No. 21) which provides that goods are supplied for use in construction of warship of Indian navy or Coast Guard and before clearances of the said goods a certificate from an Officer not below the rank of a Rear Admiral of the Indian Navy or Coast Guard or Director General of Coast Guard or any other officer of Indian Navy or Coast Guard equivalent to the Joint Secretary to the Government of India to the fact that said goods have been intended for the said use is produced to the proper officer. As the certificate was not produced by the appellant in their name, therefore, benefit of the said notification sought to be denied. Consequently, a show cause notice dated 29.12.2001 was issued to the appellant to deny the benefit of notification no. 64/95 to demand duty along with interest and for imposition of penalty. Both the lower authorities examined the issue and denied the benefit of notification. Consequently, demanding duty along with interest and penalty under section 11 AC as well as Rule 25 of the Central Excise Rules were confirmed against the appellant. Aggrieved from the said order, appellant is before us.

3. The Ld. Counsel for the appellant fairly conceded that as appellant were not having certificate issued by the proper officer in their name. Therefore, they are not entitled for benefit under notification no. 64/95-CE as held by this Tribunal in the case of Hindustan Petroleum Corporation Ltd. Vs. CCE Mumbai-2014 (301) ELT 554 (Tri-Mumbai) which has been affirmed by the Honble Apex Court reported in 2015 (320) ELT A344 (SC). Therefore, he prayed that as appellant have no case on merits but he contested the imposition of penalty on the grounds that it is an issue of interpretation of exemption notification and same has been settled by this Tribunal is the case of Hindustan Petroleum Corporation Ltd. (Supra). Therefore, penalty is not imposable as in the said case also this Tribunal held that in such circumstances, penalty is not imposable.

4. On the other hand, Ld. AR oppose the contention of the Ld. Counsel and submits that in this case issue is that whether appellant is entitled for benefit of exemption notification or not and allegation in the show cause notice is very much clear that appellant has not directly supplied the goods to Indian Navy. Therefore, they have not obtained proper certificate issued by proper officer in their name. Therefore, there is a willful act on the part of the appellant to avail inadmissible exemption. In that circumstances, penalty is rightly imposed by both the lower authorities.

5. Heard the parties. Considered the submission.

6. As the Ld. Counsel for the appellant has already conceded the issue on merits, therefore, we hold that appellant is not entitled to avail benefit of notification no.64/95-CE dated 16.03.1995 in the light of the decision of this Tribunal in the case of Hindustan Petroleum Corporation Ltd. (Supra).

7. The appellant has contested the imposition of penalty on them on the grounds that it is only an issue of interpretation of exemption notification, therefore, penalty is not imposable. The facts that goods which are in dispute have been supplied by the appellant to a supplier who ultimately supplied the goods for intended use for Indian Navy and any goods supplied to Indian Navy is entitled for exemption notification no. 64/95 ibid. The only default on the part of the appellant is that they have not obtained certificate from Indian Navy in their own name issued by proper officer. Same facts were before this Tribunal in the case of Hindustan Petroleum Corporation Ltd. (Supra) wherein this Tribunal has observed as under:

5.6 In the Moosa Haji Patrawala case also, while dealing with a similar situation, the Apex Court has held the same view in the context of Notification No. 70/77-CE dated 07.05.1977 which was also identically worded as Notification 64-95-CE and which was the predecessor notification to 64/95. The finding of the Honble Apex Court is extracted verbatim below:

 The notification exempts goods from payment of excise duty which are supplied as stores for consumption on board vessel of Indian Navy. As per definition of stores under Section 2 of the Customs Act, 1962, means goods for use in vessel or aircraft and include fuel and spare parts and other articles of the equipment whether or not for immediate fittings. In the present case, the Respondents have not supplied the goods for Indian Navy for subject to use as stores for consumption on board of a vessel. It is an admitted fact the goods in question is supplied to Voltas Ltd. and not to Indian Navy. As the goods have not been supplied by the Respondents to the Indian Navy to be used as stores for the consumption on board of a vessel we find force in the contention of the Revenue. Therefore, the Respondents are not entitled to the benefits of the Notification no. 70/77-CE in respect of ice cube making cabinets which were supplied to M/s. Voltas.

8. Thereafter, this Tribunal arrived at a decision that in such circumstances, penalty is not imposable. Therefore, we do agree with the contentions of the Ld. Counsel for the appellant. In this case also penalty is not imposable. With these terms, following order is passed:

a) Demand of duty along with interest is confirmed; and

b) Penalty imposed by way of impugned order is set aside.

9. Appeal is disposed of in the above terms.

(Dictated and pronounced in the open court)

(B. Ravichandran) (Ashok Jindal) Member (Technical) Member (Judicial)

Bhanu

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E/3684/2006-EX(DB)