2006 (2) TMI 176 - SC - Central Excise

Benefit of exemption under Notification Nos. 70/77-C.E. and 64/95-C.E. denied Held that - By Order dated 17th January, 1999 in the appeal filed by the assessee against the order dated 27th December, 1996, the Commissioner partly set aside the order in original dated 27th December, 1996 (which was the order impugned before him) and granted the benefit of the exemption notifications to the assessee in respect of the goods supplied to MDL as well. By the second order dated 20th of October, 1999 in the appeal filed by the revenue against the order dated 16th April, 1997 granting the benefit to GRSE and GSL, the appeal was dismissed while that filed by the assessee against denial of the benefit of the exemption notification to the goods supplied to MDL was accepted. Thus, as per two orders of the Commissioner, the assessee got the benefit of exemption notifications in relation to the goods supplied to all the shipbuilders. Strangely enough the revenue did not file appeal against the order passed by the Commissioner dated 17th of January, 1999 and the same attained finality. The revenue challenged the order of the Commissioner dated 20th of November, 1999. Thus leaving the question of law open and in the peculiar facts of the present case, we allow these appeals to avoid passing of contradictory and inconsistent orders arising out of the same/similar show cause notices based on the similar set of materials.

Summary

Issues:
- Appeal under Section 35L(b) of the Central Excise Act, 1944 challenging the Final Order passed by the Tribunal denying exemption benefits under Notification Nos. 70/77-C.E. and 64/95-C.E.
- Manufacturing of valves and cocks by the appellant falling under sub-heading 8481.80.
- Supply of goods as stores for consumption on board a vessel of the Indian Navy.
- Show cause notices demanding excise duty based on shipbuilders' activities.
- Orders passed by the original authority granting benefits under exemption notifications for goods supplied to certain shipbuilders.
- Appeal filed by the department against exemption benefits granted to certain shipbuilders.
- Appeal filed by the assessee against denial of exemption benefits for goods supplied to a specific shipbuilder.
- Orders passed by the Commissioner partially setting aside original orders and granting exemption benefits.
- Finality of orders due to lack of appeal by the revenue.
- Tribunal's acceptance of the revenue's appeal based on a previous decision.
- Supreme Court allowing the appeals to prevent contradictory orders.

Analysis:
1. The appeals were filed challenging the Tribunal's Final Order denying exemption benefits under specific Notification Nos. The appellant, engaged in manufacturing valves and cocks, benefited from exemption Notifications. The goods were supplied as stores for consumption on Indian Navy vessels based on shipbuilders' certificates.

2. Show cause notices were issued demanding excise duty due to shipbuilders' activities. The original authority passed orders granting exemption benefits for goods supplied to certain shipbuilders but denied for others based on the nature of shipbuilding activities.

3. The department appealed against exemption benefits granted to certain shipbuilders, while the assessee appealed against denial for goods supplied to a specific shipbuilder. The Commissioner partially set aside original orders, granting exemption benefits in some cases.

4. The revenue did not appeal one of the Commissioner's orders, which attained finality. However, they challenged another order, leading to the Tribunal's acceptance of the appeal based on a previous decision.

5. The Supreme Court allowed the appeals to avoid contradictory orders based on similar show cause notices and materials, without delving into the legal questions, thus providing relief to the appellant.