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2004 (12) TMI 465 - AT - Central Excise

Issues involved:
Whether the benefit of Notification No. 3/2001-C.E., dated 1-3-2001 (S. No. 254) is available in respect of PPE Blades manufactured and cleared by M/s. Paharpur Cooling Towers Pvt. Ltd.

Detailed Analysis:

1. Issue of Benefit of Notification No. 3/2001-C.E.:
The main issue in this appeal was whether the benefit of Notification No. 3/2001-C.E., specifically S. No. 254, was applicable to the PPE Blades manufactured and cleared by M/s. Paharpur Cooling Towers Pvt. Ltd. The Appellant argued that the parts were used in machinery supplied for a bio-mass based power project and claimed nil rate of duty under the said Notification. The Appellant contended that the benefit should be available as the parts, when used in the machinery, would be supplied free of duty as a whole. The Advocate highlighted that the Notification did not specify any condition for availing the benefit.

2. Interpretation of List 5 of the Notification:
The Appellant's Advocate emphasized that the parts mentioned in List 5 of the Notification could be procured duty-free from other manufacturers for consumption in their factory in the manufacture of machinery/equipment specified at S. Nos. 1-19. On the other hand, the Departmental Representative argued that since the goods were not consumed within the factory of production, the benefit of the notification was not applicable. The Tribunal analyzed List 5 and concluded that the benefit would only be available if the parts were consumed within the factory of production for the manufacture of goods specified at S. Nos. 1-19. Since the parts in question were not used within the factory of production, the benefit of the Notification was deemed not available.

3. Penalty Imposition:
While upholding the duty confirmed against the Appellant, the Tribunal considered the imposition of a penalty. The Tribunal noted that it was not a suitable case for imposing a penalty equivalent to the duty amount. Consequently, the penalty was reduced to Rs. 2,000. Despite this modification, the Appeal was rejected, affirming the duty but reducing the penalty amount.

In conclusion, the Appellate Tribunal CESTAT, New Delhi, in this judgment, clarified the interpretation of the Notification regarding the benefit of duty exemption for PPE Blades manufactured by M/s. Paharpur Cooling Towers Pvt. Ltd. The Tribunal ruled that since the parts were not consumed within the factory of production as required by the Notification, the benefit was not applicable. The Tribunal upheld the duty but reduced the penalty imposed on the Appellant.

 

 

 

 

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