2008 (1) TMI 742 - AT - Central Excise

Summary

Issues involved: Grant of exemption under Notification No. 108/95-C.E. u/s A to impugned goods.

Summary:
In the case before the Appellate Tribunal CESTAT, Kolkata, the issue revolved around the grant of exemption under Notification No. 108/95-C.E. dated 28-8-95 to the impugned goods. The notification provided full exemption from duty subject to two conditions. The first condition required the manufacturer to produce a certificate before clearance of the goods, stating that they are intended for use in a project financed by an approved international organization. The second condition, implicit in the notification, granted exemption to goods supplied to such a project. However, the international organization involved was not approved. The appellants claimed they were misled by Public Authorities regarding the destination of the goods, leading to incorrect certification. The issue was whether the duty demand and interest were valid despite the misunderstanding.

The Tribunal considered both sides' submissions and noted that while the certification by Public Authorities could mitigate penal action, the obligation to supply the goods for use in approved projects remained until the post-clearance condition was fulfilled. Citing precedent cases, the Tribunal held that the duty demand and interest were justified due to the continuing obligation. However, considering the certificates issued by Public Authorities, the Tribunal took a lenient view and set aside the penalties imposed in all the Appeals.

In Appeal Nos. 342/2004 and 378/2004, the advocates requested deemed export benefit under the Exim Policy once duty on the goods was paid. The Tribunal found this demand legitimate and directed the authorities to consider it favorably. In Appeal No. 427/2005, a Miscellaneous Application for extension of Stay was rejected as the Appeal was decided on the same day. The Cross Objections filed by the Department were also disposed of. The Appeals were partly allowed, setting aside penalties while confirming duty and interest demands.