2016 (3) TMI 228 - AT - Central Excise

Eligibility of exemption under notification no.3/2004-CE dated 8.1.2004 - machineries, appliances and components required for setting up of water supply plants - certificate issued by Dy.Commissioner of the District in which the project is located not produced - Held that - Perusal of the invoice dated 4.5.2005, the purchase order dated 16.2.2005 placed by M/s.VATECH WABAG Ltd. and excise duty certificate issued by M/s/ VATECH WABAG Ltd. and other correspondence submitted by the appellants make it clear that the impugned goods have been cleared by the appellant to the specified units. The appellants supplied the items as sub-contractor for the project. We find that exemption available to sub-contractors in similar type of notifications was examined in the case of Hy-TUF Steels Pvt. Ltd. (2013 (10) TMI 1382 - CESTAT AHMEDABAD )Madras) as relying on Caterpillar India Pvt. Ltd. 2013 (7) TMI 244 - MADRAS HIGH COURT held that when the machineries were ultimately put in use by the sub-contractor, who are given the job, the exemption cannot be denied. It was observed that in the absence of allegation of possible mis-use of the goods, for unintended purposes, the beneficial notification issued in public interest cannot be denied. In the present case, we find that the denial of exemption is only on the ground that the appellant s name is not figuring in the certificate issued by the District Authority. We find that on perusal of the records, it is clear that the certificate issued in the name of M/s. ONDEO NALCO INDIA LTD also mentions the purchase order placed on M/s. VATECH WABAG Ltd. , who placed the purchase order on the appellants. These facts were established by the documentary evidences. As such, we find no justification for denial of exemption.- Decided in favour of assessee.

Summary

Issues:
1. Applicability of exemption under notification no.3/2004-CE for clearance of cables without payment of duty.
2. Submission of certificate by the appellant and its validity.
3. Clarification on the discrepancy in the names of the entities involved in the purchase order.
4. Consideration of Cenvat Credit Rules, 2004 in the appeal.
5. Availability of original certificate from the Dy. Commissioner.

Analysis:

1. The appeal concerns the exemption under notification no.3/2004-CE for the clearance of cables without duty payment. The appellants claimed exemption under this notification for cables used in setting up water supply plants. The issue arose as they did not initially produce the required certificate from the Dy. Commissioner, leading to duty recovery proceedings.

2. The appellant argued that they submitted the certificate to the Central Excise Officer before clearance and later provided the original certificate as well. They contended that the denial of exemption based on the timing of submitting the certificate was unjustified as the goods were used for the specified purposes.

3. Another point raised was the discrepancy in the names on the certificate and the purchase order. The certificate was in the name of one entity, while the order was placed by another. The appellant clarified the chain of orders from one entity to another, supported by invoices and purchase orders, suggesting that the goods were supplied as a sub-contractor for the project.

4. The appellant also highlighted their compliance with the Cenvat Credit Rules, 2004 by reversing a percentage of the goods' value. This aspect was asserted to have been overlooked by the lower authorities in their decision-making process.

5. The availability of the original certificate from the Dy. Commissioner was a crucial point of contention. The respondent argued that only a certified true copy was submitted, emphasizing the necessity of a clear linkage between the products supplied and the intended purposes as per the certificate. However, the Tribunal found documentary evidence confirming the supply of goods for the specified project, justifying the exemption claim.

In conclusion, the Tribunal allowed the appeal, emphasizing that the denial of exemption solely based on the appellant's name not appearing on the certificate was unjustified. The documentary evidence provided by the appellant established the chain of supply for the project, meeting the requirements for exemption under the notification.