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2016 (1) TMI 1138 - AT - Central ExciseDenial of benefit of exemption Notification No. 64/95-C.E., dated 16-3-1995 against its Sl. No. 21 - goods supplied for use in construction of warships of Indian Navy - certificate from the Competent Authority of Indian Navy - the decision in the case of Leader Engineering Works v. CCEX 2006 (2) TMI 193 - SUPREME COURT OF INDIA referred - Held that - Hon ble Apex Court in the case of Leader Engineering Works was considering the goods which were supplied as stores for consumption on board of ship and they were supplied to ship builders and the entry considered was against Sl. No. 3 of the subject notification. Therefore, the facts in the case of Leader Engineering Works are definitely different than the facts on record of these appeals and the case not applicable. Circuit breakers and other electrical goods were distinctly supplied for use in construction of warship of Indian Navy only. In this regard, the appellant has got the certificate from the Competent Authority namely Rear Admiral of Indian Navy which is the second condition of the Notification against Sl. No. 21. In this Notification, it is nowhere mentioned that goods were to be directly supplied to Indian Navy. When the goods are being supplied to MDL which was using them for construction of warships of Indian Navy, it is very clear that conditions of the Notification against Sl. No. 21 have been complied with and the subject goods are entitled to the benefit of subject notification namely 64/95-C.E., dated 16-3-1995 - appeal allowed - decided in favor of appellant.
Issues:
Manufacturing of circuit breakers and electrical items for warships of Indian Navy; Claim of exemption under Notification No. 64/95-C.E. Analysis: The case involved the manufacturing of circuit breakers and other electrical items supplied to Mazagon Dock Ltd. for use in constructing warships of the Indian Navy. The appellants claimed exemption under Notification No. 64/95-C.E., citing a certificate from the Rear Admiral of the Indian Navy as required by the Notification. The Revenue argued against granting the exemption, referencing a Supreme Court decision in the case of Leader Engineering Works v. CCEX, where the benefit of a similar notification was not allowed for goods supplied to ship builders instead of directly to the Indian Navy. The Tribunal carefully considered the facts and submissions from both sides. It was evident that the items were specifically supplied for use in the construction of Indian Navy warships. The appellants had obtained the necessary certificate from the Rear Admiral of the Indian Navy, fulfilling the conditions of the Notification. Unlike the case referenced by the Revenue, where goods were supplied as stores for consumption on board a ship to ship builders, the present case involved direct supply for the construction of warships. Therefore, the Tribunal concluded that the appellants' goods met the conditions of Notification No. 64/95-C.E. and were entitled to the exemption. In light of the above analysis, the Tribunal allowed both appeals, confirming that the subject goods of the appellants qualified for the benefit of Notification No. 64/95-C.E. The judgment emphasized the distinction in facts between the present case and the case referenced by the Revenue, highlighting the direct supply for the construction of Indian Navy warships as the key factor in granting the exemption.
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