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2019 (4) TMI 1255 - AT - Central ExciseSupply of certain goods for use as ship stores in the ships belonged to the Indian Navy - benefit of N/N. 64/95 dated 16.03.1995 (Sl.No.3) - under construction vessels - Department was of the view that the benefit of the Notification cannot be extended to the goods supplied to Indian Naval Vessels, which were under construction - HELD THAT - The Notification extends benefit to goods, other than cigarettes, if supplied as stores for consumption on board a vessel of the India Navy. There were doubts whether the benefit can also be extended to goods supplied to Indian Navy Vessel which are under construction. However, the issue was laid to rest with the decision of the Hon ble Supreme Court on the subject in the case of LEADER ENGINEERING WORKS VERSUS COMMISSIONER OF C. EX., CHANDIGARH 2006 (2) TMI 193 - SUPREME COURT OF INDIA . Since the above clearances are duly supported by certificates from Navy, we find no reason to deny the benefit. Accordingly, the benefit of Notification No.64/95 ibid for the clearances is allowed. Appeal allowed in part.
Issues Involved:
Claim of benefit under Notification No.64/95 for goods supplied to Indian Navy vessels under construction. Detailed Analysis: 1. Background: The appeals were filed against Order-in-Appeal No.1516/Remand/Kol.-II/2009 dated 25.08.2018 covering two periods - April, 2001 to December, 2001, and January, 2002 to June, 2002. The appellant supplied goods for use as "ship stores" to Indian Navy vessels, claiming benefits under Notification No.64/95 dated 16.03.1995. 2. Legal Dispute: The Department contended that the benefit of the Notification cannot be extended to goods supplied to Indian Navy vessels under construction. The matter was remanded by the Tribunal for a fresh decision. 3. Appellant's Arguments: The appellant's counsel referred to a Supreme Court judgment which clarified that the benefit of the Notification applies only to stores for consumption on board a vessel of the Indian Navy, not for under-construction vessels. The appellant admitted liability for goods supplied to under-construction vessels for the period April-December, 2001. 4. Revenue's Justification: The Department relied on the Supreme Court decision to deny the benefit for goods supplied to ship builders like M/s. Garden Reach Ship Builders & Engineers Ltd. 5. Tribunal's Decision: The Tribunal observed that the benefit under the Notification is limited to goods supplied directly to the Indian Navy for use as ship stores. It upheld the demand for goods supplied to under-construction vessels for April-December, 2001, but allowed the benefit for clearances made to Indian Navy vessels for January-June, 2002, supported by Navy certificates. 6. Final Ruling: The Tribunal partly allowed the appeals, directing the adjudicating authority to re-calculate the demand after extending the benefit of SSI Exemption Notification and cum-duty benefit. No penalty was imposed in the circumstances of the case. This judgment clarifies the scope of Notification No.64/95 regarding the supply of goods to Indian Navy vessels under construction and establishes the criteria for availing benefits under the notification based on the nature of the supplies made directly to the Navy for use as ship stores.
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