1997 (11) TMI 209 - AT - Central Excise

Summary

Issues:
Benefit of Notification No. 184/86 for duty exemption for goods supplied to Ministry of Defence.

Analysis:
The appeal concerns the entitlement to the benefit of Notification No. 184/86, which exempts goods manufactured by specified units for supply to the Ministry of Defence from duty payment. The appellants, not listed in the notification, claim to be job workers for a listed manufacturer, M/s. Bharat Electronics Ltd. (M/s. BEL). They argue that goods manufactured by them, ultimately supplied to the Ministry of Defence by M/s. BEL, should also qualify for the notification's benefit. They rely on a letter from the Chairman of the Central Board of Customs & Central Excise, clarifying that ancillary units and subcontractors supplying goods to the main units listed in the notification should receive the exemption. The appellants assert that similar instructions have been followed in other cases resulting in dropped demands, urging a fresh examination based on this letter.

The department's representative lacks instructions on the letter's applicability and raises concerns about its status as an official Board instruction. The Tribunal notes that the notification specifies duty exemption only for goods manufactured by the listed manufacturers for defence purposes. Acknowledging the appellants' argument that their goods were for supply to M/s. BEL, who then supplied to the Ministry of Defence, the Tribunal highlights the Chairman's letter's significance. However, they emphasize that the letter was issued in the Chairman's capacity and not on behalf of the Board, necessitating an assessment of its binding nature. Referring to a Supreme Court case, the Tribunal notes that instructions by the Board would bind lower authorities.

The Tribunal expresses uncertainty regarding the circumstances under which the Chairman issued the letter and whether the Board concurred, as the Board is the statutory authority under the Customs Act. Consequently, they decide to set aside the lower authority's order and remand the matter for fresh consideration. The Tribunal directs a reevaluation of the Chairman's letter's applicability, considering the context of its issuance and the actions taken in other cases based on the letter. The appeal is thereby decided in favor of remanding the case for a new decision based on the Tribunal's observations.