2018 (2) TMI 1301 - AT - Central Excise

Benefit of N/N. 64/95 dt. 16.3.1995 - Semi-Trailer cleared to Liquid Propulsion System Centre (LPSC), Department of Space, ISRO - Department took the view that the semi-trailer is not a system or sub-system by itself, that it has not been certified as meant for use in a launch vehicle project - Held that - identical issue decided in the case of P.L. Haulwel Trailers Vs CCE Chennai 2002 (1) TMI 160 - CEGAT, CHENNAI , where it was held that Any apparatus or equipment or accessories and spare parts of scientific and technical instruments are also covered in the notification. So long as the apparatus and equipment required for using along with the scientific and technical instruments the benefit cannot be denied. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Clearance of 'Semi-Trailer' without payment of duty availing Notification No.64/95.
2. Dispute over whether the semi-trailer is a system or sub-system for a Launch Vehicle Project.
3. Validity of exemption certificate issued by the Chief General Manager of LPSC.
4. Denial of exemption due to post-clearance issuance of eligibility certificate.
5. Adjustment of amounts paid under Rule 6 (3)(b) Cenvat Credit against the demand.
6. Treatment of price realized from ISRO as cum-duty for duty demand calculation.

Analysis:
1. The case involved the clearance of a 'Semi-Trailer' to the Liquid Propulsion System Centre (LPSC) without payment of duty under Notification No.64/95. The Department disputed whether the semi-trailer qualified as a system or sub-system for a Launch Vehicle Project, leading to duty liability and penalties imposed on the appellants.

2. The appellant argued that the semi-trailer was indeed a sub-system for the Launch Vehicle Project, supported by an eligibility certificate issued by the Chief General Manager of LPSC. They contended that the certificate's reference to the exemption Notification 64/1995 should be sufficient for granting the exemption, given the authority's awareness of the signing requirements.

3. Furthermore, the appellant highlighted that the eligibility certificate was issued post-clearance, but this should not be a basis for denying the exemption. They also pointed out the failure of lower authorities to consider allowing Cenvat Credit under Rule 6 (3)(b) for the amounts paid, which could be adjusted against the demand if the appeal was rejected.

4. The appellant also argued that since duty was not collected from ISRO, the price realized should be treated as cum-duty, impacting the re-determination of the value for calculating the duty demand.

5. In support of their arguments, the appellant referred to a previous decision by CESTAT Chennai in a similar case, where the Tribunal ruled in favor of the assessee based on the description and interpretation of the notification regarding scientific and technical instruments, apparatus, and equipment.

6. After hearing both sides and reviewing the facts, the Bench found merit in the appellant's contentions, citing the previous CESTAT order that addressed the same issue. Consequently, the appeal was allowed in favor of the assessee, following the precedent set by the Tribunal.