2019 (5) TMI 869 - AT - Central Excise

Benefit of N/N. 06/2006-C.E. dated 01.03.2006 (Serial number 91) - supplies against the international competitive bidding - goods exempted from custom duty - contention of the Revenue is that the appellant should fulfill all the conditions prescribed for the purpose of exemption Notification No. 21/2002- Cus. HELD THAT - From the reading of the notification it clear that there are 2 conditions applied - The first condition is that the goods should be supplied against international competitive bidding which is not under dispute as already held by the Commissioner (Appeals). The Second condition is that the goods supplied by the appellant are exempted from duties of custom leviable when imported into India. As per Notification No. 21/2002-Cus dated 01.03.2002 (serial no. 214) the goods supplied by the appellant is admittedly exempted when imported into India, therefore, both the conditions stand fulfilled. Notification No. 06/2006-C.E does not prescribe any condition that condition provided for custom notification should be complied with by the assessee who manufacture and supply the goods indigenously under Notification No. 06/2006-C.E. The only condition is that the goods supplied by the appellant are exempted from custom duty which is not under dispute as per Notification No. 21/2002-Cus. From the reading of the condition 29 of Notification No. 21/2002-Cus, it is clear that the said condition is required to be fulfilled only in case goods are imported, therefore the said condition cannot be mutatis mutandis applied in case of goods indigenously supplied. So far the appellant s supplies is against the international competitive bidding and the goods are exempted from custom duty, if imported into India, the appellant is entitled for the exemption Notification No. 06/2006- C.E. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Interpretation of Notification No. 06/2006-C.E regarding exemption conditions.
- Applicability of conditions for custom exemption to indigenously manufactured goods.
- Dispute over whether the appellant is entitled to exemption under Notification No. 06/2006-C.E.

Analysis:

1. Interpretation of Notification No. 06/2006-C.E: The case involved the appellant claiming exemption under Notification No. 06/2006-C.E. The Revenue denied the exemption, citing non-fulfillment of condition no. 19 related to customs duty exemption. The appellant argued that the goods supplied were exempted from customs duty under a specific notification, fulfilling the conditions of Notification No. 06/2006-C.E. The Tribunal analyzed the conditions and held that the appellant met the requirements of the notification, emphasizing that the exemption condition was related to customs duty exemption when imported into India.

2. Applicability of conditions for custom exemption to indigenously manufactured goods: The appellant contended that conditions applicable for custom exemption should not be imposed on indigenously manufactured goods supplied within India. They relied on legal precedents supporting this argument, emphasizing that conditions for excise duty exemption on indigenously manufactured goods should not be equated with custom notification requirements. The Tribunal agreed with this interpretation, highlighting that the conditions for customs duty exemption were specific to imported goods and should not be applied mutatis mutandis to domestically supplied goods.

3. Dispute over entitlement to exemption under Notification No. 06/2006-C.E: The core issue revolved around whether the appellant was entitled to exemption under Notification No. 06/2006-C.E. The Tribunal reviewed the notification's conditions, specifically condition no. 19, which required goods to be exempted from customs duties when imported into India. By analyzing legal judgments and the specific circumstances of the case, the Tribunal concluded that the appellant's supplies met the conditions of international competitive bidding and customs duty exemption, thereby entitling them to the exemption under Notification No. 06/2006-C.E. The impugned order denying the exemption was set aside, and the appeal was allowed in favor of the appellant.