2013 (12) TMI 990 - AT - Customs

Exemption of Notification No. 22/2003, dated 31-3-2003 at Sl. 3. - Classification of goods - Procurement of Turnstiles without payment of Excise duty - Held that - item procured by the appellants is none other than a Security System . Therefore, the appellants are entitled for the exemption of Notification No. 22/2003, dated 31-3-2003 at Sl. 3 - Stay Granted.

Summary

Issues:
Interpretation of Notification No. 22/2003-C.E. for Central Excise duty exemption on capital goods procured indigenously under STP scheme.

Analysis:
The appellants, a 100% EOU under STP scheme, were engaged in the development, manufacturing, and export of IT enabled services. They procured 'Turnstiles' locally as a Security system without paying Central Excise duty, claiming exemption under Notification No. 22/2003-C.E. The lower authorities denied the exemption, arguing that the system was a part of a security system, not a security system as a whole. The Tribunal examined the software and system's functioning, concluding that the item procured was indeed a 'Security System.' Therefore, the appellants were found entitled to the exemption under Sr. No. 3 of the Notification. The impugned order was set aside, and the appeals were allowed with consequential relief, if any.

Conclusion:
The Tribunal, after considering the arguments and examining the evidence, held that the appellants qualified for the Central Excise duty exemption under Notification No. 22/2003-C.E. for procuring a 'Security System.' The decision was based on a thorough analysis of the system's nature and functionality, leading to the dismissal of the lower authorities' denial of the exemption.