2005 (2) TMI 336 - AT - Central Excise

Summary

Issues:
Challenge to demands on Railway Contractor for manufacturing goods for Railways; Interpretation of Notification No. 62/95-C.E. regarding exemption for goods manufactured at the site of construction for use at such site.

Analysis:

The appellant contested the demands imposed on a Railway Contractor for manufacturing PSC Slabs and Ballast Retainers for Railways, seeking the benefit of Notification No. 62/95-C.E. which exempts goods manufactured at the site of construction of buildings for use at such site. The dispute centered on whether the goods manufactured at the Railway premises near Railway Goods Shed could be considered for use in the construction of buildings with Railways per the Notification. The authorities argued that the goods were not manufactured at the site of building construction, leading to the denial of the Notification's applicability.

Upon hearing both sides, the Counsel referenced Tribunal rulings to support their stance, highlighting that the goods were manufactured at a site allotted by the Railways for construction work, thus falling within the Notification's scope. The Counsel emphasized the absence of intention to evade duty, noting the availability of a Notification for claiming exemption and the Railway's communication to the Contractor regarding duty exemption.

The Tribunal, after careful consideration, adopted a liberal interpretation of the Notification in line with previous judgments, emphasizing that the goods were manufactured at a site provided by the Railways for construction purposes. The Tribunal rejected the notion that slight distance from the construction site could negate the Notification's applicability. Additionally, the Tribunal noted the absence of duty evasion intent and the Contractor's genuine belief in duty exemption based on the Railway's communication, leading to a favorable decision for the appellant.

In conclusion, the Tribunal allowed the appeal, acknowledging that the goods were manufactured at a site allocated by the Railways and used for construction purposes, thereby qualifying for the Notification's exemption. The Tribunal also highlighted the lack of duty evasion intent and the Contractor's legitimate belief in duty exemption, resulting in a decision in favor of the appellant.