2018 (3) TMI 820 - AT - Central Excise

Benefit of N/N. 15/2012 - appellant had supplied 690 vehicles as ambulances to the Government of Maharashtra - Penalty - Held that - the vehicle cannot be used other than the ambulances after the fitment. Moreover, ambulances were supplied to the Government of Maharashtra. So, there is no chance of misuse of the vehicles - Fitment of accessories have already been done as per the requirement of the exemption list - appeal allowed - decided in favor of appellant.

Summary

Issues:
Exemption under Central Excise Tariff Act, 1985 for ambulances supplied to the Government of Maharashtra.

Analysis:
The case involved an appeal against an order-in-original passed by the Principal Commissioner of Central Excise, Indore, concerning the exemption claimed by the appellant for supplying ambulances to the Government of Maharashtra. The appellant sought exemption under Sr. No. 273 of Chapter 87 of the General Exemption list of Central Excise, which required ambulances to be duly fitted with all necessary accessories. However, the exemption was denied as the vehicles were not fitted with medical equipment, leading to a penalty of ?50 lakhs under Rule 26 of the Central Excise Rules.

During the proceedings, the appellant argued that the ambulances were fitted with various accessories essential for ambulance services, such as medical cabinets, oxygen cylinders, and patient compartments. The appellant contended that fitting medical equipment required specialized expertise not possessed by them. On the other hand, the Revenue justified the denial of exemption.

Upon considering the submissions from both parties and examining the records, the Tribunal observed that the vehicles, once fitted with the specified accessories, could only function as ambulances. Additionally, the ambulances were supplied to the Government of Maharashtra, reducing the risk of misuse. The Tribunal acknowledged that fitting medical equipment was a specialized task and not explicitly required by the exemption list. As the necessary accessories were already fitted as per the exemption requirements, the Tribunal found no justification to uphold the impugned order and set it aside.

Consequently, the Tribunal allowed both appeals, emphasizing that the vehicles met the exemption criteria by being fitted with all essential accessories specified under the exemption notification.