2004 (8) TMI 132 - AT - Central Excise

Summary

Issues involved:
Interpretation of Notification No. 64/95-C.E. for exemption eligibility of excisable goods supplied to Indian Navy vessels.

Detailed Analysis:
The Appeal raised the issue of whether excisable goods manufactured and supplied by a company are eligible for exemption under Notification No. 64/95-C.E., dated 16-3-95. The Revenue contended that the goods were not supplied as stores for consumption on board a vessel of the Indian Navy, citing previous Tribunal decisions. On the other hand, the company argued that their supplies to the Indian Navy vessels qualified as stores for consumption, emphasizing that direct supply to the Indian Navy was not a requirement under the Notification. They also highlighted a Tribunal decision that distinguished previous cases relied upon by the Revenue. The Tribunal examined the Notification, which clearly specified that the exemption applied only to goods supplied as stores for consumption on board Indian Navy vessels, not to supplies to third parties like shipbuilders. The Tribunal noted that the Supreme Court had upheld a similar decision in a previous case, affirming that the benefit of such Notifications did not extend to goods supplied to entities other than the Indian Navy. The Tribunal also referenced a case involving diesel engines for Navy ships, where the Supreme Court had dismissed an appeal against a decision that such engines did not qualify as ship stores under the Notification. The Tribunal ultimately set aside the lower court's decision and ruled in favor of the Revenue, holding the company liable to pay duty on the goods. However, the Tribunal decided not to impose a penalty, considering the nature of the issue at hand.

This detailed analysis provides a comprehensive overview of the legal judgment, covering the arguments presented by both parties, the Tribunal's interpretation of the relevant Notification, and the precedents cited to support the final decision.