2016 (1) TMI 921 - AT - Central Excise

Exemption under notification NO.6/2002-CE dated 1.3.2002 as amended vide Notification No.29/2003-CE dated 10.4.2003 denied - failure to produce the certificate before clearances and therefore are not eligible for the exemption - falire v/s late production of certificates - Held that - From the copy of certificate produced before adjudicating authority, it is clear that the goods were cleared to DMRC Ltd. for use in DMRC project and therefore the goods satisfied the condition for being exempted. The only dispute is on pressing into application the benefit of exemption the condition to produce the certificate before clearance was not complied with. In our view, when the goods have otherwise satisfied the conditions for granting the benefit, then a liberal interpretation is called for at the stage of applicability. After taking into consideration the facts, evidence and arguments placed before us, we hold that the certificate having been produced, the delay, if any, to produce the certificate is only a procedural lapse for which the benefit of exemption cannot be denied. In the appellants own case KEI Indus Ltd. vs. CCE, Jaipur-2008 (2007 (10) TMI 497 - CESTAT, NEW DELHI ) in a similar issue, this Tribunal has held that mere late production of essentiality certificate is not a ground for denying the benefit of exemption. - Decided in favour of assessee.

Summary

Issues:
- Eligibility for exemption under notification NO.6/2002-CE
- Production of certificate before clearance of goods
- Compliance with conditions for exemption

Eligibility for Exemption under Notification NO.6/2002-CE:
The case involved the appellant, a manufacturer of wires and cables, claiming exemption under notification NO.6/2002-CE for goods supplied to the Delhi Metro Rail Corporation Ltd. The department contended that the appellant did not fulfill the condition of producing a certificate from DMRC Ltd. before clearance of goods. The original authority confirmed duty with interest and penalty, upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal.

Production of Certificate Before Clearance of Goods:
The appellant argued that the certificate was already submitted to the departmental officers and re-produced before the adjudicating authority. The department, however, emphasized strict construction of the exemption notification, stating that the certificate must be produced before clearances. The Commissioner (Appeals) upheld the demand, noting that the certificate produced was a copy, not the original.

Compliance with Conditions for Exemption:
The Tribunal observed that the appellant had indeed supplied goods to DMRC Ltd., and the certificate produced before the adjudicating authority was consistent. The dispute centered on the timing of certificate submission, with the department contending that it was not received before clearance. The Tribunal, considering the facts and evidence, held that a liberal interpretation was warranted, citing a previous Tribunal ruling that late production of essential certificates does not warrant denial of exemption benefits. Consequently, the Tribunal set aside the impugned order, allowing the appeal.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing that despite procedural lapses in certificate submission timing, the goods met exemption conditions, warranting a liberal interpretation for the benefit of exemption.