2009 (10) TMI 303 - AT - Central Excise

Defence supplies- Notification No. 63/95-C.E.- Held that- the appellants are not eligible for the benefit of Notification No. 63/95 as amended not being one of the specified manufacturers. They are also not supplying the impugned goods to the Ministry of Defence. As such, we find no reason to interfere with the order passed by the lower Appellate Authority. The appeal is dismissed.

Summary

Issues:
Interpretation of Notification No. 63/95-CE for exemption eligibility.

Analysis:
The case involved a dispute regarding the eligibility of excisable goods for exemption under Notification No. 63/95-CE. The lower Appellate Authority had extensively examined the submissions made by the appellants and concluded that the exemption was available for excisable goods manufactured by specified public sector undertakings, including M/s. BEML, for supply to the Ministry of Defence. The appellants, manufacturers of paints, claimed that the paints supplied to M/s. BEML for vehicles used by the Ministry of Defence were exempt from excise duty. They relied on various documents such as trade notices, certificates, and clarifications to support their claim. However, the authorities found that the appellants were not one of the specified manufacturers entitled to the exemption and were not directly supplying goods to the Ministry of Defence. Therefore, the Tribunal upheld the lower Appellate Authority's decision and dismissed the appeal.

The Tribunal noted that the Trade Notice No. 53/92 issued by the Bangalore Central Excise Commissionerate clarified the duty implications for inputs processed by job-workers for specified PSUs like M/s. BEML. The clarification emphasized that duty paid inputs processed by job-workers for M/s. BEML, if meant for the manufacture of goods supplied for defence purposes, could be exempt from excise duty. However, it was clarified that the raw materials or inputs supplied to M/s. BEML were not inherently exempt from excise duty. The exemption under Notification No. 63/95-CE applied only when duty paid inputs were processed by job-workers for the specified PSUs, and not when inputs were directly supplied to the PSU for manufacturing purposes.

In conclusion, the Tribunal found that the appellants did not meet the criteria for exemption under Notification No. 63/95-CE as they were not specified manufacturers and were not supplying goods directly to the Ministry of Defence. Therefore, the Tribunal upheld the decision of the lower Appellate Authority and dismissed the appeal, emphasizing that the appellants were not entitled to the benefit of the exemption notification.