2010 (2) TMI 535 - HC - Central Excise

Exemption from duty under project finance Supplier awarded assessee the purchase order for the supply of Steam Generator and its accessories, directly to project implementing authority But no certificate was issued by the Project Implementing Authority in favor of the assessee Held that - Assessee cannot claim exemption from duty on the basis of certificate issued in favor of the supplier.

Summary

Issues:
1. Whether the appellant-assessee is entitled to exemption under Notification dated 28-8-1995 for goods cleared without payment of Central Excise Duty?
2. Whether the certificate issued to the supplier, not the assessee, justifies the appellant's claim for exemption?
3. Whether the appellant fulfilled all conditions mentioned in the Notification to claim the exemption?

Analysis:
1. The appellant, engaged in manufacturing accessories for boilers and tube pipe fittings, cleared goods without paying Central Excise Duty. A notice was issued demanding duty payment of Rs. 5,16,602 under Section 11A of the Central Excise Act, 1944, along with interest and penalty.
2. The appellant argued that they were entitled to exemption as the goods were intended for a project financed by an International Organization. However, the Adjudicating Authority denied the benefit, which was upheld in subsequent appeals.
3. The appellant contended that since they received a purchase order from the supplier for the project, they should be exempt. However, the court held that as the certificate was issued to the supplier and not the appellant, they cannot claim exemption based on it.
4. The court emphasized that the exemption conditions must be strictly fulfilled, and in this case, as no certificate was issued in favor of the appellant, they cannot claim exemption. The court dismissed the appeal, stating that the appellant failed to meet the requirements specified in the Notification for duty exemption.