2018 (2) TMI 1393 - AT - Central Excise

Benefit of N/N. 10/97-CE, dated 1.3.1997 - clearance of testing equipments to public funded Universities etc. - denial on the ground that Essentiality Certificate from head of the institution not produced (as was signed by the other authority) - Held that - It must be kept in mind that the intention of the Legislature in extending this exemption was only to engage research in public funded research institutions, universities, Institute of Technology etc. Discernibly, there is no allegation that the goods have not been received or used by the intended beneficiaries - the person who has signed the essentiality certificates in these cases would have done so only after being authorized to do so by the concerned institution - Essentiality certificates not having been signed by the officer designated in the notification but by some Other Officer of the same Institution is only a curable defect, of a technical nature, and can very well be overlooked - demand set aside. Demand on the ground that essentiality certificate was not available or produced - Held that - The averment of the appellants that in no case, goods were cleared by them without receipt of the certificate issued by respective buyer institutions/Colleges/ Universities should indeed be given credibility. After all, these buyers are institutions of stature and cannot be expected to obtain these goods without following requirements laid by notification and issuing the necessary Essentiality Certificates - demand set aside. Penalties also set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Alleged contraventions in availing benefits under Notification No.10/97-CE.
2. Adjudication of demand of Central Excise Duty and penalties.
3. Interpretation of conditions for availing exemption under Notification No.10/97-CE.
4. Absence of appellant during the hearing.
5. Dispute over eligibility of essentiality certificate.
6. Conditions for exemption under Notification No.10/97-CE.
7. Allegation of non-fulfillment of conditions of the notification.
8. Confirmation of demand based on non-availability of essentiality certificate.
9. Confirmation of demand based on certificates signed by unauthorized personnel.

Analysis:
The case involves the appellants, manufacturers of testing equipment, clearing goods without duty payment under Notification No.10/97-CE, meant for public funded Universities. The department issued a show cause notice proposing duty demand, interest, and penalties for various contraventions. The Commissioner's order confirmed partial duty demands and dropped penalties, leading the appellants to appeal. The appellants argued that non-submission of certificates at the time of clearance should not deny exemption, citing relevant Tribunal decisions. They emphasized compliance with conditions of the notification, including registration with DSIR and production of certificates from Head of the Institution. The Tribunal noted that the dispute centered on fulfilling notification conditions and examined specific allegations.

The Tribunal found that the demand based on certificates signed by unauthorized personnel was a technical defect, curable in nature, and set aside the demand. Regarding cases where essentiality certificates were not available or produced, the Tribunal considered appellants' submission of certificates against which goods were cleared and concluded that the demand should be set aside. As both demands were set aside, penalties imposed were also invalidated, leading to the allowance of the appeal with consequential reliefs. The Tribunal emphasized the credibility of the institutions issuing essentiality certificates and the technical nature of the defects noted in the case. The judgment highlighted the importance of complying with notification conditions for availing exemptions under Notification No.10/97-CE, ensuring proper documentation and adherence to prescribed procedures.