2009 (3) TMI 750 - AT - Central Excise

Summary

Issues:
1. Denial of benefit of Notification No. 6/06-C.E. for duty payment on components for Water Treatment Plant.
2. Denial of benefit under Notifications No. 108/95-C.E. and 10/97-C.E. for equipment related to development projects.

Analysis:
1. The first issue pertains to the denial of the benefit of Notification No. 6/06-C.E. for duty payment on components required for a Water Treatment Plant. The lower authorities demanded duty and imposed a penalty on the assessee, alleging non-compliance with the conditions of the notification. The certificate produced by the assessee was questioned for not being issued by the competent authority and lacking certain details. However, upon review, it was found that the certificate was countersigned by the Collector, and the benefit of the notification was not claimed due to the rescission of the predecessor-notification. Citing judicial precedents, it was established that even if the benefit was not claimed initially, it could be extended later, leading to a prima facie case against the demand.

2. The second issue revolves around the denial of benefits under Notifications No. 108/95-C.E. and 10/97-C.E. for equipment related to development projects. The denial led to a demand for duty and penalty on the assessee. In one instance concerning a project of the Govt. of Rajasthan, the certificate was found to be countersigned by the appropriate authority, and the denial of benefits based on technical grounds was deemed unjust. Similarly, in the case of goods supplied for the Space project, the denial was based on procedural lapses rather than the actual use of goods for the intended purpose. It was emphasized that the benefit of an Exemption Notification should not be denied due to minor technical issues if the goods were used as intended.

In conclusion, the Appellate Tribunal found that the assessee had established a prima facie case against the demands raised in both instances. Consequently, a waiver of pre-deposit and stay of recovery were granted concerning the duty and penalty amounts, ensuring relief for the assessee pending further proceedings.