2010 (11) TMI 904 - AT - Central Excise

Summary

Issues involved: Interpretation of Notification No. 10/97-C.E. for exemption eligibility of Diesel Generating sets based on whether they qualify as scientific and technical equipment.

In this judgment by the Appellate Tribunal CESTAT CHENNAI, the appellants, who are manufacturers of Diesel Generating sets, claimed exemption under Notification No. 10/97-C.E. for goods supplied to educational and research organizations. The dispute centered around whether DG sets qualify as "scientific and technical instruments, apparatus, equipment" as per the Notification. The Ld. Consultant argued that DG sets operate on scientific principles and convert diesel into electricity, thus qualifying as scientific equipment. The Tribunal noted that the exemption certificates obtained were not questioned, and based on precedent decisions granting exemption to transformers and UPS, ruled that DG sets should be considered eligible equipment for exemption under the Notification. The impugned order was set aside, and the appeal was allowed.

The Tribunal considered the submissions from both sides and reviewed relevant case laws. It was observed that the exemption certificates obtained by the appellants were not disputed. The key contention was whether DG sets, which supply power, could be classified as eligible for exemption under the Notification. The Tribunal noted that the term "equipment" in the Notification is broader than "scientific and technical instruments," and based on past decisions granting exemption to transformers, UPS, and computers, concluded that DG sets should also be considered eligible equipment for exemption. The Tribunal emphasized that since computers, not strictly scientific instruments, were allowed exemption under the Notification as equipment, DG sets should similarly be granted exemption, especially when authorized officials from eligible institutes issued exemption certificates. Consequently, the impugned order was set aside, and the appeal was allowed.