2012 (5) TMI 226 - AT - Central Excise

Demand - extended period of limitation - confiscation and penalty - respondent filed a declaration for claiming exemption under Notification No.64/95 dated 16/03/95 on the furniture items cleared at Nil rate of duty claiming these furniture to be stores for consumption on board vessel of Indian Navy where as these furniture items were used for manufacture of ships Held that - goods are to be used for supply as stores for consumption on board a vessel of Indian Navy, allegation of suppression is not sustainable when the respondent has availed the exemption on the basis of certificate issued by the Indian Navy, extended period of limitation is not invocable, order upheld and the appeals filed by the Revenue are dismissed

Summary

Issues:
1. Confirmation of demand of extended period of limitation, confiscation, and penalty against M/s.Godrej & Boyce Mfg. Co. Ltd.
2. Penalty against M/s.Mazgaon Dock Ltd.
3. Invocation of extended period of limitation based on suppression of facts by the respondent.
4. Interpretation of Notification No.64/95 for exemption claim.

Analysis:
1. The Revenue filed appeals against M/s.Godrej & Boyce Mfg. Co. Ltd. for demand confirmation, confiscation, and penalty, and against M/s.Mazgaon Dock Ltd. for penalty. The case involved the clearance of furniture items to Mazgaon Dock Ltd. under Notification No.64/95. A show-cause notice was issued due to intelligence suggesting wrongful availing of benefits under the notification. The adjudicating authority confirmed demands and penalties, which were challenged before the Commissioner (Appeals) who set aside the demands, penalties, and confiscation citing the non-invocability of extended limitation period.

2. The Revenue argued for the invocation of the extended period of limitation due to suppression by the respondent regarding the use of furniture items for ship manufacturing instead of consumption on board vessels of the Indian Navy. The Revenue contended that the respondent's declaration did not reflect the actual use of the furniture items, justifying the invocation of the extended period. However, the Assistant Vice President of M/s.Godrej & Boyce Mfg. Co. Ltd. produced a declaration claiming exemption under Notification No.64/95, based on a certificate issued by the Indian Navy for supplying goods as stores for consumption on board Indian Navy vessels.

3. Upon examining the declaration and the circumstances, the Tribunal found that the respondent had indeed claimed the exemption based on the certificate issued by the Indian Navy, contradicting the allegation of suppression. The Tribunal held that the extended period of limitation was not invocable, as the respondent had availed the exemption in accordance with the certificate. Consequently, the Tribunal upheld the lower appellate authority's decision, dismissing the Revenue's appeals against both respondents.

4. The judgment focused on the correct interpretation of Notification No.64/95 and the validity of the exemption claim made by M/s.Godrej & Boyce Mfg. Co. Ltd. based on the certificate issued by the Indian Navy. The Tribunal's analysis centered on the factual basis of the exemption claim and the absence of suppression by the respondent, leading to the dismissal of the Revenue's appeals and upholding the decision of the lower appellate authority.