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2009 (10) TMI 746 - AT - Central ExciseBenefit of N/N. 108/95-C.E., dated 28-8-1995 - supply of Chloramphenicol eye ointment I.P. to M/s. Hindustan Latex Ltd. who in turn supplied the same, in pursuance of International Competitive Bidding, to a project funded by International Development Association (IDA) - denial on the ground that IDA was not an organisation listed under N/N. 108/95-C.E. for the purpose of extending exemption. Held that - supplies made to IDA ought to be treated as supplies made to World Bank and eligible for the concession envisaged under clause (c) of the proviso to the Notification. Non-mention of IDA in the United Nations (Privileges and Immunities) Act, 1947 does not affect the status of the IDA as part of World Bank. Non-listing of IDA in the United Nations (Privileges and Immunities) Act, 1947 has no relevance to the grant of exemption under the impugned notification as supplies made to World Bank clearly are covered by the notification. Appeal dismissed - decided against Revenue.
Issues:
- Interpretation of Notification No. 108/95-C.E. for exemption eligibility. - Classification of International Development Association (IDA) as part of the World Bank. - Applicability of exemption under clause (c) of the proviso to the notification. - Comparison with previous Tribunal decisions regarding exemption for projects financed by IDA. Analysis: Issue 1: Interpretation of Notification No. 108/95-C.E. for exemption eligibility The case involved a dispute regarding the applicability of Notification No. 108/95-C.E. which exempts goods supplied to specific organizations or projects from excise duty. The dispute arose as the Department alleged that the supplies made to a project funded by International Development Association (IDA) did not qualify for the exemption under the notification. The Commissioner (Appeals) held in favor of the respondent, stating that IDA was part of the World Bank and therefore eligible for the exemption. Issue 2: Classification of International Development Association (IDA) as part of the World Bank The key contention revolved around whether IDA should be considered as part of the World Bank for the purpose of exemption eligibility under the notification. The respondent argued that IDA is an integral part of the World Bank, focusing on activities in poorer countries. The respondent provided evidence from the websites of the World Bank and IDA to support the claim that IDA is a constituent entity of the World Bank, emphasizing that the World Bank comprises both the International Bank for Reconstruction and Development (IBRD) and IDA. Issue 3: Applicability of exemption under clause (c) of the proviso to the notification The Tribunal analyzed the language of the notification and concluded that clause (c) of the proviso to the notification clearly allows for exemption for goods intended to be supplied to a project financed by the World Bank. Given that IDA is an integral part of the World Bank, the supplies made to IDA should be treated as supplies made to the World Bank, making them eligible for the concession under the notification. The Tribunal emphasized that the non-mention of IDA in certain acts does not negate its status as part of the World Bank for the purposes of exemption eligibility. Issue 4: Comparison with previous Tribunal decisions regarding exemption for projects financed by IDA The Tribunal referenced previous decisions, such as IBM India Pvt. Ltd. v. CCE, Pondicherry and Nestor Pharmaceuticals Ltd. v. CCE, Delhi, where the Tribunal upheld the grant of exemption under the same notification for projects financed by IDA. By aligning with these precedents, the Tribunal found no merit in the appeal filed by the Department and upheld the order of the Commissioner (Appeals) in favor of the respondent. In conclusion, the Tribunal rejected the appeal filed by the Department and disposed of the cross objection, affirming that supplies made to IDA, as part of the World Bank, are eligible for the exemption under the relevant notification based on the interpretation and application of the provisions outlined in the notification.
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