Sunbeam Generators Pvt. Ltd vs Commissioner Of Central Excise

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI

Appeal No.E/S/41832/2014 & E/41572/2014

[Arising out of Order-in-Appeal No.15/2014(P)(D) dt. 9.4.2014 passed by the Commissioner of Central Excise (Appeals), Chennai]

Sunbeam Generators Pvt. Ltd. Appellant

Versus

Commissioner of Central Excise, Puducherry Respondent

Appearance:

Ms.V. Ramya, Advocate For the Appellant

Shri K.P.Muralidharan, AC (AR) For the Respondent

CORAM :

Honble Shri R. Periasami, Technical Member Honble Shri P.K. Choudhary, Judicial Member

Date of Hearing/Decision : 13.5.2015

FINAL ORDER No.40535/2015

Per R. Periasami

As the issue lies in a short compass, with the consent of both sides, after dispense with the requirement of predeposit, we proceed to take up the appeal itself for hearing and disposal.

2. The appellants are engaged in the manufacture of Diesel Generating Sets falling under Chapter Heading 8502 of the First Schedule to the CETA 1985. They had removed 2 Nos. of Diesel Engine to HCIL without payment of Central Excise duty by claiming exemption under Notification No.108/95-CE dt. 18.8.1995 based on the certificate issued by Rail Vikas Nigam Ltd. a Govt of India, who is the Project Implementing Authority. The appellants have been denied the benefit of Notification No.108/95-CE dt. 28.8.95. the adjudicating authority has allowed the benefit. On appeal by Revenue, Commissioner (Appeals) set aside the order and allowed the Revenue's appeal.

3. The matter was listed on 9.3.2015 when appellant was directed to produce proof of certificate from the Project Implementing Authority that DG sets were installed.

4. Today, Ld. Counsel on behalf of appellant submitted copy of the letter dt. 22.4.2015 issued by Rail Vikas Nigam Ltd., a Govt of India Enterprise for claiming the benefit of exemption, wherein it is certified that 2 DG sets have been supplied by the appellants as per the project certificate and the equipments have been installed in the work. She also relied on the judgement of Hon'ble High Court, Madras in the case of CCE Pondicherry Vs Caterpillar India Pvt. Ltd.  2013 (297) ELT 8 (Mad.) wherein on identical issue Revenue's appeal was rejected by upholding Tribunal's order.

5. Heard Ld.DR who reiterates the impugned order.

6. After hearing from both sides, we find that adjudicating authority in his order dt. 20.6.2012 dropped proceedings by relying Tribunal's order in the case of Cater Pillar India Ltd. whereas the Commissioner (Appeals) while allowing Revenue's appeal at para 3(e) observed that Revenue has already filed appeal before Hon'ble High Court. He did not consider the Tribunal's order. We find that Hon'ble High Court in the cited decision (supra) has dismissed the Revenue's appeal by upholding Tribunal's order. The relevant paragraphs 6 to 8 of the Hon'ble High Court order is reproduced as under :-

"6. Aggrieved by this, the assessee went on appeal before the CESTAT, who agreed with the assessees contention by following the decisions of the Tribunal in Toyo Engineering India Ltd v. CC, Mumbai reported in 2000 (122) E.L.T. 315. The Tribunal pointed out that it was not the case of the Department that the goods had not been supplied to the projects financed by the International Organisation. The CESTAT further pointed out that there is nothing on record to show that the goods were used in any other project other than in implementation of the Golden Quadrilateral Project; considering that the goods had admittedly been used in the project and after the completion of the projects, the goods supplied to the various sub-contractors were entrusted to retain the goods supplied could not stand in the way of granting the exemption under the Notification. Further there was no evidence that the goods in question were used in any other project after the implementation of Gold Quadrilateral Project. In the circumstances, the CESTAT allowed the appeal. Aggrieved by this, the present Civil Miscellaneous Appeal by the Revenue.

7. Reiterating the? contentions found in the show cause notice, learned Standing counsel appearing for the Revenue pointed out that the on the admitted fact that the machineries had not been entrusted to the contract implementing authority and that the supply of goods were to the sub-contractors leading to possible misuse of the goods for unintended purposes, no exception could be made to the imposition of duty and there-by reject the benefit of the Notification.

8. We do not find? any justifiable ground to interfere with the order of the CESTAT based on a factual finding and there was no material placed by the Revenue on the allegations of the possible misuse of the goods for unintended purposes by the sub-contractors. Secondly, being the beneficial Notification issued in public interest and the project itself being executed fully by the Contractors as per the directions of the Project Implementing Authority, the fact that the machineries were not given directly to the project implementing authority but given to the agency executing the work in fact cannot go against the assessees claim. Thus ultimately, as the machineries had been put in use by the sub-contractors, who were given the job of execution the claim for exemption cannot be denied. The use of the phrase supplied to the projects financed by the said United Nations or an International Organisation and approved by the Government of India clearly shows that the condition for grant of exemption is supply of the goods towards the project and nothing beyond. The extract of the Notification No. 108/95-C.E., dated 28-8-1995 reads as follows :-

In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944, (1 of 1944) read with sub-section (3) of 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 Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (here-inafter referred to as the said goods) when supplied to the United Nations or an International organisation for their official use or supplied to the projects financed by the said United National or an international organisation and approved by the Government of India, from the whole of :-

(i) the duty of excise leviable thereon under Section 3 of the Central Excises and Salt Act, 1944 (1 of 1944) and

(ii) the additional duty of excise leviable thereon under sub-section (1) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957). Thus with all the conditions satisfied, the beneficial Notification applies to the case on hand. In the circumstances, we do not find any justification to introduce any condition or read in a restrictive manner. Consequently, the Revenues appeal fails and hence, the same is dismissed. No costs."

Respectfully following the decision of Hon'ble Madras High Court (supra), the impugned order is set aside and the appeal is allowed. Stay application is disposed.

(Dictated and pronounced in open court)

(P.K. CHOUDHARY) (R. PERIASAMI) JUDICIAL MEMBER TECHNICAL MEMBER

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