2016 (4) TMI 146 - AT - Central Excise

Demand of the differential duty - exceeded the adhoc exemption granted to Konkan Railway corporation for supply of pre-stressed concrete sleepers - FAA set aside th demand - Held that - In exercise of the powers conferred by sub-section 2 of Section 5A of the Central Excise & Salt Act, 1944, and in supersession of Adhoc Exemption Order No. 2/2/94-CX dated 4.4.94, the Central Government, having regard to the strategic importance of the Konkan Railway Line and being satisfied that it is necessary in the public interest so to do, hereby exempts prestressed concrete sleepers manufactured and supplied during the period December, 1990 onwards, by the following manufacturers, to Konkan Railway Corporation, from payment of the whole of the duty of excise leviable thereon. It can be seen from the above reproduced adhoc exemption, the exemption is to the value of the sleepers and does not include the excise duty paid, if any. The calculation brought forth by the learned counsel for the respondent is correct as if the amount of excise duty paid approximately 3.29 crores is reduced from 23.36 crores as is mentioned in the grounds of appeal, the respondent s clearance to Konkan Railway Corporation lies within the limit of 21.80 crores as is mentioned in the adhoc exemption. - Decided against revenue

Summary

Issues Involved:
Demand of differential duty exceeding adhoc exemption limit for supply of pre-stressed concrete sleepers.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal No. 18/2003 dated 22/01/2003. The issue revolved around the demand of the differential duty from the respondent due to exceeding the adhoc exemption granted to Konkan Railway Corporation for the supply of pre-stressed concrete sleepers. The first appellate authority set aside the demand, stating that the value of clearances was well within the exemption limit specified in the revised adhoc exemption order. The Revenue contested this decision, arguing that the respondent had exceeded the exemption limit and misrepresented the value of the supplies made to the Corporation. The Revenue sought a fresh adjudication to determine the correct value of clearances. The respondent's counsel countered this by highlighting that the total value included the excise duty paid by the respondent, which, when deducted, kept the clearances within the exemption limit of 21.80 crores. The Tribunal agreed with the respondent's contentions, stating that the adhoc exemption was to the value of the sleepers and did not include the excise duty paid. Therefore, the appeal filed by the Revenue was dismissed.

This case involved a dispute over the demand of differential duty due to exceeding the adhoc exemption limit for the supply of pre-stressed concrete sleepers to Konkan Railway Corporation. The first appellate authority had ruled in favor of the respondent, stating that the value of clearances fell within the exemption limit specified in the revised adhoc exemption order. The Revenue argued that the respondent had surpassed the exemption limit and provided incorrect information regarding the value of supplies made. However, the respondent's counsel pointed out that the total value considered by the Revenue included the excise duty paid by the respondent, which, when subtracted, kept the clearances within the exemption limit. The Tribunal concurred with the respondent's interpretation, emphasizing that the adhoc exemption was applicable to the value of the sleepers only and not the excise duty paid. Consequently, the Tribunal dismissed the Revenue's appeal.

In conclusion, the Tribunal upheld the decision of the first appellate authority, ruling in favor of the respondent and dismissing the Revenue's appeal. The Tribunal clarified that the adhoc exemption granted for the supply of pre-stressed concrete sleepers to Konkan Railway Corporation was based on the value of the sleepers and did not include the excise duty paid by the respondent. As a result, the Tribunal found no reason to interfere with the impugned order, and the appeal filed by the Revenue failed.