2003 (10) TMI 174 - AT - Central Excise

Demand - Limitation - Whether the benefit of Notification No. 108/95-C.E. is available to the appellant - HELD THAT - Following the ratio of the decision in Mangalore Fertilizers Chemicals Ltd. v. Dy. Commissioner, 1991 (8) TMI 83 - SUPREME COURT , we hold that the benefit of Notification cannot be denied to the appellants merely on the ground that the certificate, stipulated in the Notification, has been produced subsequently, for the clearance of the goods when it is not in dispute that the project is financed by the International Organisation and approved by the Central Government. We also agree with the learned representative of the appellant company that the demand of duty is barred by time, the extended period of limitation for demanding duty cannot be invoked as neither the appellants have suppressed any facts nor made any wilful misdeclaration. Besides filing the classification declaration, they had sent intimation also to the Assistant Commissioner about clearing the motor vehicles by availing the exemption under Notification. Further, they had produced a certificate also from the Project Authority. The mere fact that the said certificate was not countersigned by the Financial Secretary, will not amount to wilful misdeclaration by the appellants. It was opened to the department to verify the certificate and demand duty within the time limit prescribed u/s 11A(1) of the Central Excise Act. We set aside the impugned order and allow the appeal.

Summary

Issues involved: Whether the benefit of Notification No. 108/95-C.E. is available to the appellant.

In this appeal, the appellant, a motor vehicle manufacturer, supplied vehicles to a government project approved by the International Development Association. The appellant claimed exemption under Notification No. 108/95 but was denied by the Commissioner due to the absence of a required certificate prior to clearance of the vehicles. The Commissioner also imposed a penalty for alleged misleading actions by the appellant.

The appellant later submitted the necessary certificate, countersigned by the Principal Secretary, after the clearance of the vehicles. The Appellate Tribunal considered the timing of certificate submission in light of previous judgments and held that the benefit of the Notification cannot be denied solely based on the certificate being produced subsequently. The Tribunal emphasized that the condition in the Notification should be seen as procedural, following the precedent set by previous court decisions.

The Tribunal further noted that the demand for duty was time-barred as the appellant had not suppressed any facts or made wilful misdeclarations. The appellant had properly declared their exemption claim and communicated with the Assistant Commissioner regarding the same. The Tribunal concluded that the appellant had fulfilled the necessary conditions for the exemption and overturned the Commissioner's decision, allowing the appeal.