2011 (2) TMI 394 - AT - Central Excise

Notification No. 10/97-C.E. dated 1-3-97 - The only ground adduced by the department is that the items supplied viz. M.V. Bus Duct for 22KV new AFD Sub Station product 3000A rating Bus Duct 400 Ampers Long Indoor type Bus Ducts Live Power Control Center are used in the distribution and monitoring of power and hence they do not appear to be Scientific and Technical instruments apparatus equipment or accessories/spare parts of the same - There is no dispute about the usage of equipment as certified by the competent authority - once the goods become eligible for exemption a liberal interpretation has to be given in allowing the exemption - Appeal is rejected

Summary

Issues:
Departmental appeal against excise duty exemption under Notification No. 10/97-C.E. for supply of M.V. Bus Duct for research institution.

Detailed Analysis:
The case involved a departmental appeal against an order-in-appeal passed by the Commissioner (Appeals) regarding the excise duty exemption claimed by M/s. Techno Electricals for supplying M.V. Bus Duct to Bhabha Atomic Research Centre (BARC) under Notification No. 10/97-C.E. The notification exempts scientific and technical instruments for research purposes if certified by a Deputy Secretary to the Government of India. The Deputy Secretary certified that BARC is a research institution under the Department of Atomic Energy, justifying the exemption. The adjudicating authority and the lower appellate authority upheld the exemption, emphasizing the connection of the supplied goods to research activities at BARC.

The department appealed, arguing that the supplied items were not scientific or technical instruments but used for power distribution and monitoring, thus not qualifying for the exemption. The department contended that the items did not fall under the purview of the exemption notification. However, the Tribunal noted that the terms "scientific and technical instruments, apparatus, equipment or accessories/spare parts" are broad and cover various types of equipment, not limited to a specific category. The Tribunal highlighted that the competent authority had certified the usage of the equipment, supporting its eligibility for the exemption.

Referring to the case of Mangalore Chemicals Fertilizers Ltd v. Deputy Commissioner, the Tribunal emphasized the principles of interpreting exemption notifications. It stated that while doubts about applicability should be construed strictly against the subject, once the subject falls within the notification, a wider and liberal construction should be applied. Following this principle, the Tribunal concluded that the goods supplied by the assessee were rightly entitled to the exemption under Notification No. 10/97-C.E., as determined by the adjudicating authority and the lower appellate authority. Consequently, the Tribunal rejected the department's appeal, affirming the exemption for the supplied goods intended for research purposes at BARC.