2016 (8) TMI 438 - AT - Central Excise

Notification 10/97 CE dated 01.03.1997 - Entitlement for benefit - manufacture of Screened Conduction Cooled Video Cards for OAC (Open Architecture Computers); ii) Environment Control and Fuel Management Electronic unit; iii) Cockpit Interface Unit to Aeronautical Development Agency (ADA); iv) Automated Test Equipment (ATE) for Compact Electronic Unit ( CEU ) to Combat Vehicles Research and Development Establishment (CVRDE); and v) Hardware Simulator to Laser Science & Technology Centre ( LASTEC ) as per the specifications and diagrams furnished by Aeronautical Development Agency. Held that - it is very much obvious that items in question are meant for research projects. There has been specific certificate issued by an authority not below the rank of Deputy Secretary to the Govt of India certifying that the said goods mentioned under scientific and technical description therein are meant for research purposes only as a condition mentioned in Column 4 of the table attached to the Notification No. 10/97CE dated 10.3.1997. Therefore, these items are covered by the Notification No. 10/97 and they fulfill all the conditions for claiming the benefit of exemption Notification No.10/97 (supra). Without iota of any doubt, the subject goods are entitled to the benefit of Notification 10/97. - Decided in favour of appellant

Summary

Issues:
Benefit of Notification No 10/97-CE to specific items: i) Screened Conduction Cooled Video Cards for OAC; ii) Environment Control and Fuel Management Electronic unit; iii) Cockpit Interface Unit to Aeronautical Development Agency (ADA); iv) Automated Test Equipment (ATE) for Compact Electronic Unit to Combat Vehicles Research and Development Establishment (CVRDE); and v) Hardware Simulator to Laser Science & Technology Centre (LASTEC).

Analysis:
The judgment concerns the eligibility of certain items for the benefit of Notification No 10/97-CE dated 1.3.1997. The lower authorities argued that the items, being parts of aircraft with specified usage in the cockpit of Light Combat Aircraft (LCA), did not fit the description in the Notification and thus were not eligible for the benefit. However, the appellants contended that the items met the conditions of the Notification and fell within the specified description. They highlighted that the items were supplied for defense projects and research purposes, with certification from a Deputy Secretary to the Govt of India confirming the same.

The Revenue argued against including the items under the Notification, citing a Supreme Court decision and emphasizing the assessing authority's findings. The Tribunal observed that the lower authorities did not carefully consider the purpose of the items, which were intended for research projects and had certification for research purposes. The Tribunal criticized the Revenue's stance, noting that the authorities failed to understand the nature of the items and their intended use for research. The Tribunal found that the items fulfilled the conditions of the Notification and were indeed eligible for the benefit as per the provisions.

Ultimately, the Tribunal concluded that the items in question were covered by Notification No 10/97 and met all the conditions for exemption. The Tribunal criticized the Revenue authorities for contesting the appellants' rightful claim, leading to unnecessary resource expenditure. The appeal was allowed, granting consequential benefits to the appellants. The judgment highlighted the importance of understanding the purpose and nature of goods in determining their eligibility for statutory benefits, emphasizing the need for thorough consideration by the authorities to avoid unnecessary litigation and appeals.