2015 (5) TMI 493 - SC - Central Excise

Demand of duty - Distribution of goods free of costs to weaker section of society - Held that - The appellant authorities, however, issued show cause notice which culminated into demand of excise duty on the ground that certificates that were required in this behalf could not be produced. We find that these certificates were duly produced and the Tribunal has taken note of and discussed those certificates in the impugned order and on the basis of which a finding of fact is arrived at that the assessee had in fact distributed the goods free of cost to the economically weaker sections of the society. In these circumstance, the respondent could not be fasten with any liability to pay the excise duty. - No reason to interfere with the order of the Tribunal - Decided against Revenue.

Summary

Issues:
1. Liability of excise duty on products supplied under the World Food Programme project.
2. Requirement of certificates for exemption from excise duty.
3. Tribunal's decision on the production of required certificates.

Analysis:
1. The judgment dealt with the liability of excise duty on products supplied under the World Food Programme project by a 100% Export Oriented Unit engaged in the manufacture of nutritious food falling under a specific sub-heading of the Central Excise Tariff Act, 1985. The appellant authorities issued a show cause notice demanding excise duty as the required certificates for exemption were allegedly not produced. However, the Tribunal noted and discussed the certificates in the impugned order, concluding that the goods were indeed distributed free of cost to the economically weaker sections of society. As a result, the respondent was found not liable to pay the excise duty.

2. The judgment highlighted the importance of certificates from concerned authorities for availing exemption from excise duty when supplying food products to the weaker sections of society under specific programs approved by the State Government. The Exim Policy's provisions, particularly paras 9.10 and 9.26, specify that no excise duty is payable when goods are distributed free of cost to the weaker sections, subject to the condition of producing approved certificates confirming the distribution. In this case, the respondent fulfilled this requirement by producing the necessary certificates, which the Tribunal acknowledged and relied upon to make a factual determination in favor of the respondent.

3. The Tribunal's decision not to interfere with the order in light of the produced certificates and the factual finding that the goods were distributed as required under the exemption provisions signifies a crucial aspect of the judgment. By dismissing the appeals, the Tribunal affirmed that the respondent had complied with the conditions for exemption from excise duty by providing the requisite certificates, thereby upholding the principle that fulfillment of documentary requirements is essential to claim such exemptions under the relevant policy framework.