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2022 (2) TMI 1425 - AT - Central ExciseClearance of equipment without production of certificates prescribed in N/N. 33/2005-CE dated 8th September 2005 and in the absence of evidence of power purchase agreement - benefit of notification denied - demand alongwith interest and penalty - HELD THAT - The contents of the said certificate is not ambiguous about the goods that are entitled to exemption. The goods have been certified to be of necessary for initial setting up of the project which is eligible for exemption. Neither of the lower authorities has established a contrary position. It is also stated in the said certificate that power purchase agreement did exist between the beneficiary of the exemption notification and the energy distribution agency. This fact has also not been controverted by the lower authorities. The prescribed certificate was in possession of the appellant and, consequently, entitles them to eligibility for exemption. Non-production at the time of clearance is entirely procedural and which has since been made good within a short lapse of time. A fine distinction has been drawn by the Hon ble Supreme Court in COMMR. OF CUS. (IMPORTS), MUMBAI VERSUS TULLOW INDIA OPERATIONS LTD. 2005 (10) TMI 502 - SUPREME COURT holding that it is also well-settled that the Legislature always intends to avoid hardship. In a situation of this nature, the exemption notification cannot be construed in a way which would prove to be oppressive in nature. However, we do not intend to lay down a law that delay on the part of the authorities in granting such certificates would automatically enable an assessee to obtain refund. There are no reason to deny benefit of exemption notification - impugned order set aside - appeal allowed.
Issues involved:
Compliance with conditions of notification no. 33/2005-CE dated 8th September 2005 for equipment clearance. Analysis: Issue 1: Compliance with notification conditions The appeal by M/s Crompton Greaves Ltd challenged an order by the Commissioner of Central Excise & Customs regarding compliance with conditions in notification no. 33/2005-CE dated 8th September 2005 for equipment clearance to M/s Lakshmi Sugar Mills Co Ltd. The dispute centered on the production of certificates and evidence of a power purchase agreement. The original authority imposed duty liability, interest, and penalties due to belated intimation of clearance and lack of certificate evidence. The first appellate authority upheld this decision. Issue 2: Legal arguments The appellant's counsel argued that the prescribed certificate was in their possession, and the delay in submitting clearance intimation was due to holidays. They cited legal precedents emphasizing substantive compliance with conditions for exemption. The Authorized Representative highlighted specific conditions in the notification and referred to a Supreme Court decision stressing strict adherence to notification conditions. Issue 3: Interpretation of exemption conditions The Tribunal found the issue focused on producing the prescribed certificate before goods clearance at the factory gate. While the eligibility for exemption was not in question, the key issue was possession of the certificate and subsequent exemption eligibility. Legal principles emphasized strict compliance with exemption conditions, with exemptions to be construed strictly. The Tribunal noted that the certificate clearly certified the goods as eligible for exemption and confirmed the existence of a power purchase agreement, unchallenged by lower authorities. Conclusion: The Tribunal concluded that the appellant's possession of the prescribed certificate entitled them to exemption eligibility, despite procedural non-compliance at the time of clearance. The delay in production was rectified promptly, leading to the allowance of the appeal and setting aside of the impugned order. The judgment highlighted the importance of strict compliance with exemption conditions while considering the specific circumstances of each case. Judgment: The Tribunal pronounced the order on 20/02/2024, allowing the appeal and setting aside the previous decision.
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