2003 (10) TMI 584 - AT - Central Excise

Summary

Issues:
Eligibility for exemption under entry 2 of Notification 10/87 for goods supplied to non-commercial institutions. Justification of penalty imposed on the appellant.

Eligibility for Exemption under Notification 10/87:
The appeal considered the eligibility of the appellant for exemption under entry 2 of the table to Notification 10/87 for goods supplied to non-commercial institutions. The exemption required the institution to be registered with the Government of India in the Department of Scientific and Industrial Research, with certification that the institution is not engaged in any commercial activity and that the goods are solely for research purposes. The Commissioner (Appeals) upheld the denial of exemption by the Assistant Commissioner due to non-compliance with this condition. The appellant argued that a certificate from the Director of Medical Education, Madhya Pradesh, fulfilled the conditions. However, the Tribunal found this certificate insufficient as it did not meet the specific requirements outlined in the notification. Consequently, the denial of exemption was deemed appropriate.

Penalty Imposed on the Appellant:
Regarding the penalty imposed on the appellant, it was noted that the appellant failed to ensure compliance with the notification conditions before clearing the goods without duty payment. The appellant admitted to not furnishing the required certificate from the specified authority to the Government of India. The Tribunal deemed the certificate from the Director of Medical Education, Madhya Pradesh, as unacceptable for the notification's purposes. The appellant could not provide a valid explanation for not obtaining the necessary certification. Consequently, the Tribunal upheld the penalty of Rs. 1.87 lakh, considering it proportionate to the gravity of the offense, especially in relation to the duty amount of Rs. 7.40 lakhs. The appellant's failure to adhere to the notification requirements justified the penalty imposed.

In conclusion, the Tribunal dismissed the appeal, affirming the denial of exemption under Notification 10/87 due to non-compliance with the specified conditions and upholding the penalty imposed on the appellant for failing to ensure adherence to the notification requirements before clearing the goods without duty payment.