2011 (7) TMI 923 - AT - Central Excise

Notification No.108/95-CE dated 28.08.95 - The purchase order disclosed that the split air-conditioners were meant for the use in the leased residences - merely because the goods were not used for offices but for residential purposes, it can not make any difference once the authorised officer had certified that such goods even though were meant for use in the leased residences, the same were for official purposes by the World Bank - Decided in favor of the assessee

Summary

Issues:
- Benefit of Notification No.108/95-CE dated 28.08.95 on split air-conditioners not intended for official use.
- Refusal to sustain penalty by Commissioner (Appeals).

Analysis:
The judgment by the Appellate Tribunal CESTAT, DELHI involved appeals arising from the rejection of the benefit of Notification No.108/95-CE dated 28.08.95 on the grounds that the split air-conditioners supplied were not intended for official purposes. The facts revealed that the appellants produced a certificate from the World Bank stating that the split air-conditioners were intended for the official use of the bank, entitling them to exemption of excise duty as per the notification. Although the purchase order indicated the air-conditioners were for leased residences, the certificate from the authorized signatory of the World Bank specifically certified them for official use. The Tribunal emphasized that once the authorized officer certified the goods for official use, even if they were for residential purposes, the appellants were entitled to the benefit under the notification. Therefore, the impugned order rejecting the benefit was set aside, and the appellants were held entitled to the exemption under the said notification for the goods in question.

Regarding the penalty issue, since it was established that the appellants were entitled to the benefit of the notification, the question of imposing a penalty did not arise. Consequently, the impugned order was deemed unsustainable, and the appellants were granted the exemption under the notification, leading to the allowance of the appeal with consequential relief, while the cross appeal by the department was dismissed. The judgment highlighted the importance of the certification for official use by the authorized officer, which superseded the actual purpose of the goods, ensuring the entitlement to the benefit under the notification.