2008 (1) TMI 755 - AT - Central Excise

Summary

Issues:
Interpretation of exemption under Notification No. 108/95 for supplies to projects funded by Asian Development Bank (ADB) and applicability of Rule 6 of Cenvat Credit Rules.

Analysis:
The case involved a dispute regarding the applicability of exemption from duty under Notification No. 108/95 for supplies made to projects funded by the Asian Development Bank (ADB) and the reversal of credit under Rule 6 of Cenvat Credit Rules. The Commissioner had ordered the appellant to pay 10% of the value of clearances on the grounds that the benefit of exception to credit reversal under Rule 6 does not apply to supplies to ADB-funded projects, based on the view that ADB is not an international organization as per the Ministry of External Affairs website. However, the appellant argued that the Commissioner overlooked a gazette notification recognizing ADB as an international organization and suggested that the Ministry of External Affairs website may not be updated.

The Tribunal noted the contradictory views taken by the Commissioner in granting the benefit of the notification recognizing ADB as an international organization while denying the exception provided under Rule 6 of Cenvat Credit Rules. Considering that the benefit of the notification had been granted, the Tribunal found that the appellant had a strong case in their favor. Therefore, the Tribunal granted an unconditional stay on the decision of the Commissioner, allowing the appellant to continue without the need to pay the 10% of the value of clearances amounting to approximately Rs. 1.8 crores. The appeal was scheduled for a hearing on a later date.

In conclusion, the Tribunal's decision favored the appellant by granting a stay on the Commissioner's order to pay 10% of the value of clearances for supplies to ADB-funded projects. The Tribunal emphasized the importance of consistency in interpreting legal provisions and recognized the significance of the gazette notification over the information available on the Ministry of External Affairs website in determining the status of ADB as an international organization for the purposes of availing exemptions and credits under the relevant rules and notifications.