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2017 (1) TMI 1227 - AT - Central ExciseBenefit of Exemption N/N. 108/95-CE dated 28/08/1995 - scope of SCN - appellants cleared machines to different contractors for carrying out contract work - denial of benefit on the ground that after completion of the projects, the said machines remained with the contractors, and where not sent to appellants - Whether in the facts and circumstances of the case, the Adjudicating Authority has gone beyond the scope of the show cause notice or not? - Held that - the issue before the Adjudicating Authority was that the goods after completion of the projects remained with contractors but the Adjudicating Authority has held that the goods were not supplied to the projects, therefore, we hold that the adjudication authority has gone beyond the show cuase notice - reliance placed in the case of Caprihans India Ltd. 2015 (11) TMI 1170 - SUPREME COURT , where it was held that where the impugned order is beyond the allegation in the SCN, the same is to be set aside - impugned order not sustainable. Whether in the facts and circumstances of the case the appellant is entitled to avail benefit of Exemption N/N. 108/95 dated 28.08.95 or not? - Held that - As all the conditions of the Notification have been satisfied by the appellants, therefore, the appellant is entitled for benefit of the above Notification. Merely, on the ground that the goods have been supplied to the contractor directly who has executed the project in question and after the implementation of the products the machine shall remain with the property of the contractor cannot be reasons to deny the benefit of notification - reliance placed in the case of Caterpillar India Pvt. Ltd. 2005 (3) TMI 243 - CESTAT, NEW DELHI - benefit of notification allowed. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the Adjudicating Authority has gone beyond the scope of the show cause notice. 2. Whether the appellant is entitled to avail the benefit of Exemption Notification No. 108/95 dated 28.08.95. Detailed Analysis: Issue No. I: Scope of the Show Cause Notice The appellant contended that the impugned order is beyond the allegations in the show cause notice. The show cause notice alleged that the goods, after being used for the projects, were retained by the contractors, which should have been communicated to the excise authority. The adjudicating authority, however, held that the goods were not supplied to the project and were paid for by the contractors, not the Project Authority. This was seen as going beyond the scope of the show cause notice. The adjudicating authority's reliance on the explanation to Notification No. 108/95-CE introduced in 2008 was also contested. The explanation clarified that the benefit is available when goods are not withdrawn from the project. The adjudicating authority interpreted this to mean that the exemption is not available if the goods are withdrawn at any stage by the contractor. However, the appellant argued that this explanation does not have retrospective effect and only clarifies the existing position. The Tribunal found that the adjudicating authority had indeed gone beyond the show cause notice, as the original issue was the retention of goods by contractors post-project completion, not the initial supply to contractors. Citing the Supreme Court's decision in Caprihans India Ltd., the Tribunal held that the adjudicating authority's findings were unsustainable as they went beyond the show cause notice. Issue No. II: Entitlement to Exemption Notification No. 108/95 The appellant argued that they met all conditions of the Exemption Notification No. 108/95, which exempts goods supplied to projects financed by international organizations and approved by the Government of India. The appellant provided necessary certificates from the Project Implementing Authority. The Tribunal noted that the projects were financed by the Asian Development Bank and approved by the Government of India, thus fulfilling the notification's conditions. The Tribunal referenced the case of Caterpillar India Pvt. Ltd., where it was held that goods supplied to sub-contractors for a project financed by an international organization and used in the project are eligible for exemption. The Tribunal emphasized that the notification does not stipulate that goods must be directly paid for by the financing organization. The fact that goods remained with contractors post-project did not negate the exemption, as long as they were used for the project. The Tribunal also noted that the explanation introduced in 2008 to Notification No. 108/95-CE was not applicable to clearances made before its introduction. The decision in DEE Development Engineers Ltd. was distinguished as the appellant in that case failed to produce the necessary certificate, which was not the issue here. In conclusion, the Tribunal set aside the impugned order, holding that the appellant was entitled to the benefit of Exemption Notification No. 108/95, as all conditions were satisfied. The appeal was allowed with consequential relief.
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