2010 (4) TMI 643 - AT - Central Excise

Stay - Waiver of pre-deposit - benefit under Notification No. 108/95-C.E - exemption - project financed - supply of goods, in order to avail the exemption under the said Notification - exemption is available to the goods which are meant exclusively for the project - Held that - goods have been supplied to the possession and control of the contractors, and not the project - benefit under Notification No. 108/95-C.E not available - waiver of the amount required to be deposited in terms of the impugned order - dismiss the application for stay

Summary

Issues Involved:
1. Challenge to order denying benefit under Notification No. 108/95-C.E.
2. Interpretation of conditions for availing exemption under the notification.
3. Goods supplied to project or contractor.
4. Applicability of previous judgments in similar cases.
5. Requirement of sufficient evidence to claim exemption.
6. Consideration of financial hardship for granting stay.

Issue 1: Challenge to order denying benefit under Notification No. 108/95-C.E.
The appellants contested the order denying the benefit of Notification No. 108/95-C.E., dated 28-8-95. They relied on various precedents to argue that the notification does not mandate goods to be purchased in the name of the project for the benefit to apply.

Issue 2: Interpretation of conditions for availing exemption under the notification.
The crux of the matter revolved around the interpretation of the notification's conditions. The appellants claimed that goods obtained by the contractor for the project should also qualify for the exemption, while the respondent argued that the goods must be obtained for the project and under the control of the Project Authority.

Issue 3: Goods supplied to project or contractor.
The Tribunal emphasized that the exemption under the notification is only applicable when goods are intended to be supplied exclusively for the project financed by specified international organizations. Goods purchased by the contractor in their name do not meet this criterion, as they lack exclusive control by the project authority.

Issue 4: Applicability of previous judgments in similar cases.
The Tribunal differentiated the present case from previous judgments involving goods supplied directly to projects financed by international organizations. It clarified that the goods must be intended for the project's benefit and not merely utilized by the contractor in the project.

Issue 5: Requirement of sufficient evidence to claim exemption.
The Tribunal reiterated that the burden lies on the assessee to demonstrate eligibility for exemption under the notification. It cited Supreme Court decisions emphasizing the need for the assessee to provide substantial evidence to qualify for exemption.

Issue 6: Consideration of financial hardship for granting stay.
In deciding on the grant of stay, the Tribunal considered the absence of a prima facie case for the appellants due to the goods not being supplied to the project but to the contractor. Financial hardship was also deemed irrelevant, leading to the dismissal of the stay application and directing the deposit of the required amount within a specified timeframe.