2016 (4) TMI 144 - AT - Central Excise

100% EOU/STP Unit - Eligibility for exemption Notification No. 1/95-CE dated 4/1/1995 and Notification No. 140/91-Cus dated 22/10/1991 - Held that - The goods procured by the respondent are indeed capital goods and as per the conditions, Asstt. Commissioner has to satisfy himself that the goods so procured either have been installed in the premises of the respondent or otherwise used within the bonded premises within a period of one year from the date of procurement. According to this, there is no condition that the goods so procured should be used in the development of software. As regard the facts of installation/ use of the goods, in the premises of the respondent has not been disputed. The judgments cited by the Ld. A.R. neither relevant to the facts of the present case nor on the issue of the notification involved in the present case. Therefore judgments cited by the Ld. A.R. are not applicable in the present case. Ongoing through the judgments relied upon by the Ld. Counsel for the respondent, we find that on the identical facts the exemption Notification No. 1/95-CE has been extended to the assessees. Therefore the ratio of the judgments are applicable in the facts of the present case. As per our above discussion and case laws, we are of the considered view that the Ld. Commissioner(Appeals) has rightly allowed the exemption Notification No. 1/95-CE dated 4/1/1995 and Notification No. 140/91-Cus dated 22/10/1991 by proper application of mind. The impugned order is maintained. - Decided against reveneue

Summary

Issues:
- Entitlement to exemption under Notification No. 1/95-CE and Notification No. 140/91-Cus for goods procured by a 100% EOU/STP Unit.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI challenged the Order-in-Appeal passed by the Commissioner (Appeals), Central Excise, Pune, denying exemption under the mentioned notifications. The Adjudicating authority had confirmed duty demand and imposed penalties, alleging that the goods procured were not used for software development, hence ineligible for exemption. The Commissioner(Appeals) allowed the exemption, dropping the demand on merit and time bar grounds. The Revenue appealed, arguing that the goods were not used for software development as required by the notifications. The Respondent contended that the goods only needed to be installed or used within bonded premises, not necessarily for software development. The Tribunal considered the conditions of both notifications and relevant case laws cited by both parties.

The Tribunal focused on determining whether the respondent's goods qualified for exemption under Notification No. 1/95-CE and Notification No. 140/91-Cus. The conditions of both notifications were analyzed, emphasizing that the goods should be installed or used within the premises or bonded premises within a specified period, without a specific requirement for software development. It was noted that the goods procured were capital goods, and the installation/use within the respondent's premises was not disputed. The Tribunal found that the judgments cited by the Revenue were irrelevant to the case, while those cited by the Respondent supported extending the exemption to similar cases. Consequently, the Tribunal upheld the Commissioner(Appeals)' decision to allow the exemptions under the notifications, dismissing the Revenue's appeal.

In conclusion, the Appellate Tribunal CESTAT MUMBAI ruled in favor of the Respondent, maintaining the exemption under Notification No. 1/95-CE and Notification No. 140/91-Cus. The Tribunal found that the goods met the conditions of installation/use within the premises, without a specific requirement for software development, as per the notifications. The decision was based on a thorough analysis of the notifications, relevant case laws, and the specific facts of the case, leading to the dismissal of the Revenue's appeal.