2016 (6) TMI 1052 - AT - Central Excise

Exemption under the notification No. 108/95-CE - there was difference between Revenue and the appellant on the ground that the goods supplied were not covered in the specified list approved by the funding agency and also the appellant was stranger to the project. - Held that - The appellant is directed to make an application before the adjudicating authority by 27th May, 2016, praying for fixing the date of hearing. Once such an application is filed, the authority shall fix the date of hearing in the month of June and hear the appellant. Upon hearing, he shall examine the pleadings, evidence and law and shall pass a reasoned and speaking order within three months from the last date of hearing. - Matter remanded back.

Summary

Issues:
Exemption of excise duty on goods supplied by sub-contractor for a project funded by specified agencies.

Analysis:
The appellant contended that despite goods being directly sent to the project and invoiced to the principal contractor, who received duty exemption, the appellant was denied the same exemption. The project was recognized by specified agencies, granting appropriate exemption to principal contractors. The appellant, as a sub-contractor, supplied goods for the project. The appellant referred to a judgment by the Madras High Court emphasizing that goods meant for project use qualify for exemption. The appellant requested duty exemption for goods supplied to the project.

Revenue argued that the appellant, as a sub-contractor, was not recognized by the funding agency involved in the project. Revenue supported the authorities' decision to deny exemption to the appellant, stating the appellant was a stranger to the project. The authorities' order denying exemption was deemed appropriate by Revenue.

The Tribunal clarified that duty exemption applies to goods used in specified projects funded by agencies, not to the person using the goods. The Tribunal noted that the appellant supplied goods to the principal agency for project implementation, a fact undisputed by Revenue. However, there was a dispute regarding whether the goods supplied were included in the approved list by the funding agency and whether the appellant was truly involved in the project.

The Tribunal directed the adjudicating authority to examine the invoices provided by the appellant to verify the use of goods in the project. The Tribunal highlighted that the project implementation was certified by the Ministry of Power. The matter was remanded to the adjudicating authority for a thorough examination, granting the appellant a fair opportunity to prove the use of goods in the project.

The Tribunal referenced a judgment by the Madras High Court and an apex court decision to guide the adjudicating authority in reaching a conclusion. The appellant was instructed to file an application for a hearing, and the authority was directed to issue a reasoned order within three months. The Tribunal emphasized the need for an expeditious resolution of the dispute and clarified that the remand was necessary for further examination based on the observations provided.