2000 (9) TMI 153 - AT - Central Excise

Summary

Issues:
1. Entitlement to benefit of exemption Notification Nos. 36/94 and 51/95.
2. Interpretation of the expression "site" in the exemption notifications.

Comprehensive Analysis:

Issue 1: The primary issue in this case revolves around the entitlement of the appellants to the benefit of exemption Notification Nos. 36/94 and 51/95. The appellants, a state-owned corporation engaged in construction projects, were involved in the construction of an expressway corridor project and manufactured beams at a location provided by the J&K Government. The Commissioner confirmed a duty demand and imposed a penalty on the appellants, contending that since the beams were not manufactured at the actual site of construction, the benefit of the notifications could not be extended to them. The appellants argued that the beams were solely used for the project and should be exempt from duty based on the notifications.

Issue 2: The interpretation of the expression "site" in the exemption notifications was crucial to determining the applicability of the duty exemption. The Commissioner's narrow interpretation, focusing on the physical location of beam manufacturing, was challenged by the appellants. It was argued that the term "site" should be construed liberally to include premises allocated for manufacturing goods used in construction work, even if not at the immediate construction site. The Tribunal emphasized that the notifications aimed to benefit construction companies and contractors engaged in projects like flyovers and bridges, necessitating flexibility in interpreting the term "site" to encompass locations allocated for manufacturing purposes.

Judgment: The Tribunal, after considering precedents and legal principles, held that the Commissioner's view was erroneous. The Tribunal stressed that the purpose of the notifications was to facilitate construction activities by granting duty exemptions for goods manufactured at sites designated for construction work. The Tribunal highlighted that in similar cases, duty exemptions had been granted when goods were manufactured at locations away from the immediate construction site. Additionally, a circular by the CBEC clarified that the term "site" should not be narrowly construed and could include premises provided under a contract for manufacturing goods used in construction. Consequently, the Tribunal set aside the Commissioner's order, allowing the appellants' appeal and granting them relief in accordance with the law.