2019 (5) TMI 459 - AT - Central Excise

Goods supplied to projects funded by an International Organization, approved by the Government of India - benefit of N/N. 108/95-CE dated 28.08.1995 - Whether the exemption under Notification No.108/95-CE dated 28.08.1995 is available when the goods have been dispatched in the name of contractors approved and assigned with the project work by the Project Authority? HELD THAT - The issue decided in the case of H. SARKAR CO. VERSUS COMMISSIONER OF C. EX., KOLKATA-II 2008 (1) TMI 728 - CESTAT, KOLKATA and CATERPILLAR INDIA PVT. LTD. VERSUS COMMISSIONER OF C. EX., PONDICHERRY 2005 (3) TMI 243 - CESTAT, NEW DELHI , where it was held that notification No. 108/95-CE dated 28.08.1995 is also available to sub-contractors for manufacture and supply of goods for or on behalf of the main contractor (who has won the contract for the supply of goods to the projects financed by the Un or an international organization and approved by the Government of India) for execution of the said project, subject to compliance of other specified conditions, if any. Appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal for early hearing | Interpretation of Notification No.108/95-CE | Denial of exemption benefit | Adjudicating Authority's decision | Grounds of appeal | Case laws and circulars cited | Moot point of appeal | Settlement of the issue | Adjudicating Authority's observations | Supreme Court's dismissal | Affirmation of view in other cases | Clarification by CBEC | Final decision of the Tribunal

Analysis:
The judgment concerns a Misc. Application for early hearing of an appeal filed by the Revenue against an Order-in-Original. The dispute revolves around the interpretation of Notification No.108/95-CE, which grants exemption from excise duty for goods supplied to projects funded by an International Organization. The Department alleged that the exemption was wrongly availed by the Respondent as goods were not supplied directly to the Project Implementing Authority (PIA). The Adjudicating Authority dropped the demand, prompting the Revenue's appeal.

The Respondent argued that goods dispatched to contractors approved by the Project Authority still qualify for the exemption. Citing relevant case laws, including decisions by the Tribunal and High Court, the Respondent contended that the issue had been settled in favor of the assessee. The Respondent also referenced a circular by the CBEC supporting their position.

The Tribunal analyzed whether the exemption under the Notification was applicable when goods were dispatched to contractors instead of the PIA directly. Relying on previous judgments and the Adjudicating Authority's observations, the Tribunal found in favor of the Respondent. The Tribunal highlighted that the conditions for exemption were met, and the goods were used for the intended project, thus dismissing the Revenue's appeal.

The Tribunal referenced the clarification issued by the CBEC, affirming that the exemption could extend to subcontractors supplying goods for the project. Considering all aspects, the Tribunal upheld the Adjudicating Authority's decision, rejecting the Revenue's appeal. The judgment provides a detailed analysis of the legal interpretations, case laws, and circulars, leading to the final decision in favor of the Respondent.