2014 (9) TMI 945 - AT - Central Excise

Exemption under Notification No. 108/95-C.E. - Interest u.s 11AB - Held that - Respondent had supplied mild steel CTD bars for use in certain projects financed by Asian Development Bank and being implemented by Rajasthan Urban Infrastructure Development Project Jaipur. There is no dispute that the necessary certificates as per the requirement of the exemption Notification certifying that the goods supplied are required for the projects and that the projects are financed by the Asian Development Bank through loan and have been duly approved by the Govt. of India have been produced. The only objection of the Department is that the Respondent s name is not mentioned as supplier of the material in the certificates. But since it is not denied that the Respondent have supplied the material to the persons mentioned in the certificates and there is no allegation of diversion of the material supplied for any other purpose in view of the judgment of the Hon ble Madras High Court in case of Caterpillar India Pvt. Ltd. (2005 (3) TMI 243 - CESTAT NEW DELHI) the benefit of the exemption cannot be denied. Therefore there is no infirmity in the impugned order - Decided against Revenue.

Summary

Issues:
Interpretation of Notification No. 108/95-C.E. for duty exemption on supplied goods for specific projects financed by Asian Development Bank.

Analysis:

The case involved a dispute regarding the eligibility of duty exemption under Notification No. 108/95-C.E. for the supply of mild Steel CTD Bars to projects financed by the Asian Development Bank. The Respondent had supplied the bars to various parties for projects of Rajasthan Urban Infrastructure Development Project, Jaipur, which were financed by the Asian Development Bank. The Department contended that since the required certificates were not in the name of the Respondent and the goods were not directly supplied to the projects, the duty exemption was not applicable. The Additional Commissioner confirmed a duty demand against the Respondent, which was appealed to the Commissioner (Appeals) and allowed based on a Tribunal judgment in a similar case. The Revenue filed an appeal against this decision, arguing that the exemption required certificates in the name of manufacturers/suppliers and direct supply to the projects financed by international organizations.

During the hearing, the Revenue reiterated their stance that the Respondent was not eligible for the exemption due to certificates not being in their name. On the other hand, the Respondent's counsel cited a judgment from the Hon'ble Madras High Court supporting their position and the Tribunal's decision in a related case. The Respondent argued that the certificates produced fulfilled the requirements of the exemption notification, and there was no diversion of the supplied material for other purposes.

After considering the arguments and examining the records, the Tribunal found that the Respondent had indeed supplied the material for the specified projects financed by the Asian Development Bank. Despite the certificates not mentioning the Respondent as the supplier, the Tribunal relied on the judgment of the Hon'ble Madras High Court in a similar case to rule in favor of the Respondent. The Tribunal concluded that as long as the material was supplied to the parties mentioned in the certificates and not diverted for other purposes, the benefit of the exemption could not be denied. Consequently, the Revenue's appeal was dismissed, and the cross objection by the Respondent was also disposed of in their favor.