2018 (2) TMI 1562 - AT - Central Excise

Benefit of exemption - actual user condition - N/N. 05/2006-CE dated 1.3.2006 - intended for use in the manufacture of handicrafts and utensils - Held that - The only condition is to be complied with by the appellant that the goods sold by them and to be intended for use in the manufacture of utensils and handicrafts - Admittedly, as per the invoices issued by the appellant as well as their buyer, the intention is very much clear that the said goods were to be used for manufacture of utensils/handicrafts. The intended use of the said goods has been established by the appellant, in that circumstance, the benefit of the notification cannot be denied. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against denial of benefit under Notification No.05/2006-CE for goods intended for use in handicrafts and utensils.

Analysis:
The appellant, engaged in manufacturing brass products, appealed against the denial of benefits under Notification No.05/2006-CE for goods intended for handicrafts and utensils. The investigation revealed discrepancies in the actual use of the goods by the buyer, which were not for handicrafts but for testing equipment. The appellant argued that their invoices and buyer certificates confirmed the intended use for handicrafts, citing relevant case law to support their claim. The respondent contended that the goods were actually used for industrial equipment, not handicrafts. The Tribunal noted that the appellant met the conditions of the notification as the goods were intended for handicrafts, supported by invoices and buyer certificates. The Tribunal emphasized that the notification did not require proof of actual use, only the intention for use in handicrafts, as established by the appellant.

The Tribunal referred to relevant sections of the notification, highlighting the key condition that the goods must be intended for use in the manufacture of handicrafts and utensils. They noted that the appellant's compliance with this condition through invoices and buyer certificates warranted the benefit of the notification. Citing precedents, the Tribunal emphasized that the notification did not necessitate proof of actual use, only the intention for use in handicrafts. The Tribunal rejected the respondent's argument that actual use was essential, emphasizing the legislative intent behind the notification's language.

In conclusion, the Tribunal upheld the appellant's entitlement to the benefit under Notification No.05/2006-CE, as the goods were intended for use in handicrafts and utensils, meeting the notification's conditions. The impugned order was set aside, and the appeal was allowed with consequential relief. The judgment clarified that the notification did not require proof of actual use, only the intention for use in handicrafts, as demonstrated by the appellant's documentation.