2013 (1) TMI 732 - AT - Central Excise

Benefit of Notification No. 108/95 dated 28-8-1995 - project was financed by Japan Bank of International Corporation which is not an International Organization under the United Nations Privileges 10, 000/- imposed under Rule 25 is set aside. - Decided partly in favour of assessee.

Summary

Issues:
1. Restoration of appeal dismissed for non-prosecution
2. Denial of benefit of Notification No. 108/95
3. Imposition of penalty under Rule 25 of the Central Excise Rules, 2001

Analysis:
1. The applicants filed for restoration of the appeal, which was dismissed for non-prosecution. The order dismissing the appeal was recalled after reasons were explained, and the appeal was taken up for hearing.

2. The appellants, engaged in manufacturing excisable goods falling under Chapter 73 of the Central Excise Act, availed the benefit of Notification No. 108/95 from May 2001 to February 2002. However, the adjudicating authority denied the benefit of the Notification, confirming a demand of Rs. 14,60,532 along with interest and imposing a penalty of Rs. 10,000 under Rule 25 of the Central Excise Rules, 2001. The appeal against this decision was dismissed by the Commissioner (Appeals).

3. The appellants contended that they provided the necessary certificate as required under the Notification, stating that the goods were supplied to a project financed by an International Organization. The revenue argued that the project was financed by Japan Bank of International Corporation, which did not qualify as an International Organization under the United Nations Privileges & Immunities Act, 1947. The Tribunal found that the Notification provided exemption for goods supplied to projects financed by International Organizations listed in the Annexure to the Notification. Since Japan Bank of International Corporation was not a specified organization in the Annexure, the Tribunal upheld the denial of the benefit of the Notification.

4. Regarding the penalty imposed under Rule 25 of the Central Excise Rules, the Tribunal noted that the appellants produced a certificate dated 28-2-2001 issued by the empowered officer of MSEB, endorsed by the State Govt. of Maharashtra. Based on this evidence, the Tribunal concluded that there was no case for the imposition of the penalty. Therefore, the penalty of Rs. 10,000 imposed under Rule 25 was set aside, while upholding the rest of the impugned order.

In conclusion, the Tribunal recalled the order dismissing the appeal for non-prosecution, upheld the denial of the benefit of Notification No. 108/95 due to the project not being financed by a specified International Organization, and set aside the penalty imposed under Rule 25 of the Central Excise Rules, 2001 based on the certificate provided by the appellants.