2003 (9) TMI 641 - AT - Central Excise

Summary

Issues:
Interpretation of Notification 64/95-C.E., applicability of exemption for goods supplied for consumption on board a vessel of the Indian Navy, invoking longer period of limitation, denial of benefit of notification, classification of goods supplied for use in a vessel under construction, availability of benefit of notification only for goods supplied for consumption on board a vessel already in existence, confirmation of Tribunal's decision by the Supreme Court, limitation period for demand raised, imposition of penalty.

Interpretation of Notification 64/95-C.E.:
The dispute centered around whether the appellants supplying final products to a shipbuilder for a warship under construction were entitled to the benefit of Notification 64/95-C.E., dated 16-3-95. The Commissioner denied the benefit, stating that goods used for fitments into a warship under construction did not constitute consumption on board a vessel. He also interpreted 'stores' as provisions ready to be drawn upon, not for immediate use, leading to the denial of the notification's benefit.

Invoking Longer Period of Limitation:
The Commissioner invoked the longer period of limitation under Chapter VII-A of Central Excise Rules, 1944, due to the appellants' alleged suppression of the actual end use that would qualify for the notification's benefit. He held the appellants responsible for proper assessments and duty discharge, leading to the proviso to Section 11A being rightly invoked.

Confirmation of Tribunal's Decision by Supreme Court:
The Tribunal's decision, confirmed by the Supreme Court, established that the benefit of Notification 64/95-C.E. is available only when goods are supplied for consumption on board a vessel already in existence. The Supreme Court upheld the Tribunal's interpretation, dismissing any justifiable reason to deviate from the established view.

Limitation Period for Demand Raised:
Following the precedent set by the Tribunal in a similar case, the demand raised against the appellants was held barred by limitation for the period 1994-1995 to 1998-1999, except for the six months preceding the show-cause notice issuance. The demand beyond the normal period was deemed time-barred based on the certificates issued by Naval authorities and other relevant materials presented during assessments.

Imposition of Penalty:
In the absence of justification, the penalty imposed on the appellants was set aside, leading to the disposal of the appeal without the penalty. The decision was made based on the circumstances of the case and the findings regarding the benefit of Notification 64/95-C.E. for goods supplied for consumption on board a vessel already in existence.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, KOLKATA provides a comprehensive overview of the issues involved, the arguments presented, and the final decision rendered based on the interpretation of relevant legal provisions and precedents.