2012 (7) TMI 714 - AT - Central Excise

Demand - denial of benefit of Exemption Notification No.108/95-CE Held that - Goods were not supplied to the specified project - Exemption under the Notification clearly requires that the goods to be supplied to the project financed by the International Organisation and approved by the Government of India. In case the goods were not supplied to the specified project, the benefit of the Notification is not available demand upheld

Summary

Issues:
- Denial of benefit of Exemption Notification No.108/95-CE dated 28.8.1995
- Interpretation of provisions of Notification No.108/95-CE
- Challenge regarding the benefit of cum-duty price

Analysis:

1. The appellant, a manufacturer of insulated electric wire cables, appealed against the order confirming a demand after being denied the benefit of Exemption Notification No.108/95-CE. The appellant claimed the benefit for supplying wires and cables for a small hydro project in Karnataka, but the benefit was denied as the goods were supplied to a different entity, M/s. Sulzer Flovel Hydro Ltd., and not directly to the hydro project.

2. The appellant argued that since M/s. Sulzer Flovel Hydro Ltd. was the supplier of electro-mechanical equipment to the hydro project, the wires and cables supplied to them should be considered as supplied for the hydro project. The appellant contended that as the goods were used in the manufacture of equipment for the hydro project financed by the World Bank, they should qualify for the Notification's benefit.

3. The Revenue relied on previous decisions to support the denial of benefit, citing cases where it was held that goods not directly supplied to specified projects do not qualify for the Notification's exemption. The Notification requires goods to be supplied to a project approved by the Government of India and financed by an International Organisation, with a certificate confirming the necessity of the goods for the project's execution.

4. The Tribunal noted that the benefit of the Notification was correctly denied as the goods were not directly supplied to the specified project but to M/s. Sulzer Flovel Hydro Ltd. The Tribunal referenced previous judgments emphasizing the requirement for goods to be supplied directly to the project financed by the International Organisation and approved by the Government of India to qualify for the Notification's exemption.

5. In a separate appeal by the Revenue, the challenge was regarding the Commissioner (Appeals) allowing the benefit of cum-duty price, citing a pending review petition related to a Supreme Court decision. The Tribunal clarified that the Supreme Court had already dismissed the review petition in the relevant case, leading to the dismissal of both appeals.

6. In conclusion, the Tribunal upheld the denial of the benefit of the Exemption Notification to the appellant and dismissed both appeals, emphasizing the requirement for goods to be directly supplied to the specified project to qualify for the exemption under Notification No.108/95-CE.