2008 (6) TMI 520 - AT - Central Excise

Summary

Issues Involved:
Interpretation of Notification No. 64/95-C.E. for exemption from excise duty for goods supplied to Indian Navy as stores for consumption on board a vessel, Allegations of goods being construction material, Verification of evidence submitted by the respondents before Adjudicating Authority, Compliance with the decision of the Hon'ble Supreme Court in the case of Leader Engg. Works.

Detailed Analysis:

Interpretation of Notification No. 64/95-C.E.:
The case involved the interpretation of Notification No. 64/95-C.E., which exempted goods from excise duty if supplied as stores for consumption on board a vessel of the Indian Navy. The issue revolved around whether the goods in question met the criteria of being supplied as stores for consumption on board a vessel, as alleged in the show cause notices.

Allegations of Goods Being Construction Material:
The Respondents were accused of supplying goods that were deemed to be construction material rather than stores for consumption on board a vessel. The Adjudicating Authority upheld this view and denied the benefit of the exemption notification, leading to the imposition of duty and penalty. The Commissioner (Appeals) later reversed this decision based on a certificate submitted by the respondents without proper verification.

Verification of Evidence Submitted:
The Advocate for the respondents argued that the Commissioner (Appeals) correctly accepted the certificate issued by the Indian Navy as proof that the goods were indeed supplied as stores for consumption on board a vessel. However, the Revenue contended that this certificate was not adequately verified and relied on a Supreme Court decision to support their position.

Compliance with Supreme Court Decision:
The Tribunal, after considering the arguments from both sides and examining the relevant facts, found that the Adjudicating Authority's decision was contrary to the Supreme Court's ruling in the case of Leader Engg. Works. The Tribunal emphasized the necessity of verifying the evidence, particularly the certificate provided by the respondents, before reaching a conclusion on whether the goods qualified for the exemption under the notification.

Conclusion:
In light of the above analysis, the Tribunal set aside the previous order and remanded the matter to the Adjudicating Authority for a fresh decision. The Tribunal directed the Adjudicating Authority to verify the certificate submitted by the respondents and make a determination based on the criteria outlined in the Supreme Court decision regarding the direct supply of goods to the Indian Navy as stores for consumption on board a vessel. The appeals were allowed by way of remand, emphasizing the importance of proper verification and compliance with legal precedents in such matters.