2024 (3) TMI 690 - AT - Central Excise

Availment of wrongful benefits under the Central Excise Notification - Appellant is a sub contractor of ONGC or not - goods cleared under International Competitive Bidding - invoking condition no. 41 c (iv) of the Customs Notification No. 12/2012 Customs dated 17.03.2012. to deny the Appellant exemption availed under Central Excise Notification - Appellant has not furnished an affidavit to the effect that they are the bonafide sub contractors of ONGC - HELD THAT - The demand has been raised by the Department asserting that the Appellant has not furnished an affidavit to the effect that they are the bonafide sub contractors of ONGC. It is pertinent to note here that the condition for claiming exemption under the said notification corresponds to the requirement of the goods being eligible for exemption and the furnishing of such documents in support of the claims by the importers whereas in the present case the Appellants are domestic suppliers and as regards the goods being eligible for exemption there exists no dispute to the fact by the Department. The said issue under similar circumstances has been settled by the Hon ble Tribunal, Mumbai in the case of KENT INTROL PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE 2014 (2) TMI 633 - CESTAT MUMBAI has held that So long as the goods are exempt, the condition to be satisfied by the domestic suppliers is that they should be supplied under International Competitive Bidding which the appellant has fulfilled in these appeals. Therefore, we have to uphold the contention of the appellant and reject the contention of the Revenue. In view of the above judgment, in the present case being similar issue and facts involved that of above judgment, the Appellant are eligible for exemption under Central Excise Notification under Notification No. 12/2012 CE upon fulfilling all conditions stipulated therein, thus sufficiently establishing that the goods dealt with by the Appellants qualify for exemption - it is found that the department s allegation that the Appellant has wrongfully availed exemption has no basis as demand has been confirmed demand on an insignificant issue as domestic manufacturers cannot be expected to comply with such conditions that are required to be imposed on importers. Therefore, the appeal succeeds on merits. The impugned orders are set aside and appeals are allowed.

Summary

Issues:
The case involves the Appellant M/s ACI Industrial Organic Pvt. Ltd appealing against Orders related to the clearance of excisable goods under Chapter 29 of the Central Excise Tariff Act, 1985, and availing Cenvat Credit under the CENVAT Credit Rules, 2004, specifically regarding the exemption from payment of Central Excise duty for supplying field chemicals to ONGC under International Competitive Bidding.

Brief Facts and Arguments:
The Appellant, a domestic supplier, cleared field chemicals to ONGC under International Competitive Bidding, availing exemption under Central Excise Notification No. 12/2012 - CE. The Department alleged that the Appellant wrongfully availed benefits under the Central Excise Notification by not fulfilling conditions prescribed for importers, which the Appellant contested based on the Customs Notification and the nature of their supply.

The Appellant argued that as domestic suppliers, they are not obligated to fulfill conditions specific for importers, citing a previous judgment and emphasizing that they fulfilled the conditions required for exemption under the relevant notifications.

The Department reiterated its findings from the impugned order, maintaining the position taken against the Appellant.

Judgment:
After considering the submissions and records, the Tribunal found that the Appellant supplied goods under International Competitive Bidding to ONGC and availed exemption under the Central Excise Notification, which was not disputed. The dispute centered around a specific condition of the Customs Notification, which the Department used to deny the exemption claiming the Appellant did not provide an affidavit as a sub-contractor of ONGC.

The Tribunal noted that the condition in question pertained to importers, while the Appellants were domestic suppliers, and there was no dispute regarding the goods' eligibility for exemption. Citing a relevant precedent, the Tribunal held that domestic suppliers fulfilling conditions for exemption are eligible, rejecting the Department's claim of wrongful exemption.

Therefore, the impugned orders were set aside, and the appeals were allowed with consequential relief, if any, in accordance with the law, based on the established eligibility of the Appellants for exemption under the Central Excise Notification.

The judgment was pronounced in the open court on 15.03.2024 by the Hon'ble Members of the Tribunal.