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2012 (11) TMI 606 - AT - Central ExciseBenefit of the Notification No. 74/93-CE dated 28.2.1993 denied - manufacture of PSC poles - Held that - The Notification lays down twin conditions, and unless both the conditions are satisfied exemption cannot be claimed. Admittedly, Chhattisgarh State Electricity Board is not a Department of the Government. Merely because 100% capital is owned by State Government does not make it a body at par with the State Government. Hence the PCC poles manufactured in the factories which admittedly belong to the Electricity Board does not qualify for exemption. That apart, the intended or actual user of the poles also being the Board itself, and not any Department of the State Government, the other condition is also not fulfilled - against assessee. Penalty under Rule 25 - Held that - As prior to the decision of Larger Bench of the Tribunal there are divergent views on the issue it is not a case for imposition of penalty hence deleted.
Issues involved:
- Benefit of Notification No. 74/93-CE for waiver of pre-deposit of dues - Eligibility of applicants for exemption under Notification No. 74/93-CE - Interpretation of whether Chhattisgarh State Electricity Board is a Department of the State Government for exemption eligibility - Imposition of penalty under Rule 25 of the Central Excise Rules Analysis: Issue 1: Benefit of Notification No. 74/93-CE for waiver of pre-deposit of dues The applicants sought waiver of pre-deposit of dues based on the Larger Bench decision of the Tribunal regarding the benefit of Notification No. 74/93-CE. The demands were confirmed after denying the benefit of the notification, leading to the filing of appeals for hearing. Issue 2: Eligibility of applicants for exemption under Notification No. 74/93-CE The appellants, engaged in manufacturing PSC poles, claimed benefit under Notification No. 74/93-CE, which was denied by the adjudicating authority and upheld by the Commissioner (Appeals). The Tribunal found that the benefit of the notification was settled by the Larger Bench in previous cases, establishing that the appellants were not eligible for the exemption. Issue 3: Interpretation of whether Chhattisgarh State Electricity Board is a Department of the State Government for exemption eligibility The consultant for the appellants argued that the goods manufactured were intended for use by various Departments of the State Government, which would qualify for exemption. However, it was clarified that the Electricity Board, not being a Department of the State Government, did not meet the conditions required for exemption under the notification. Issue 4: Imposition of penalty under Rule 25 of the Central Excise Rules Regarding the imposition of penalties under Rule 25 of the Central Excise Rules, the Tribunal noted divergent views on the issue prior to the Larger Bench decision. As it was not a clear case for penalty imposition, the penalties were set aside, while the impugned orders were upheld based on the decision regarding exemption eligibility. In conclusion, the judgment denied the benefit of Notification No. 74/93-CE to the appellants, emphasizing that the Chhattisgarh State Electricity Board was not considered a Department of the State Government for exemption eligibility. Additionally, the penalty imposed under Rule 25 of the Central Excise Rules was set aside based on the lack of clarity prior to the Larger Bench decision.
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