2017 (7) TMI 21 - HC - Central Excise

Interpretation of statute - N/N. 32/2005-CE, dated 17.08.2005, read with amendment N/N. 35/2005-C.E., dated 29.11.2005; amendment N/N. 30/2006-C.E., dated 09.05.2006 and amendment N/N. 60/2008-C.E., dated 24.12.2008 - restriction of refund to the extent of duty paid on cement and steel, utilised in the construction of houses, which were affected by tsunami - Held that - A perusal of the Notification would show that the purpose of issuing the Notification, which is an exemption Notification was to reimburse the specified goods from whole of the duty of excise leviable under the Central Excise Act, 1944 (in short the CE Act ). This aspect is evident upon the reading of the first part of Notification, wherein, it has been indicated that in excise of the powers conferred under Section 5A(1) of the CE Act, read with Sections 91 and 93 of the Finance (No.2) Act, 2004, the Central Government is satisfied that it is in public interest to exempt the cement and steel used in construction of houses, which were affected by tsunami in any concerned districts located in the State of Tamil Nadu, Andhra Pradesh, Kerala and the Union Territories of Pondicherry and Andaman and Nicobar Islands from the whole of the duty of excise leviable thereon under the said Acts . Under clause 2 of the said Notification, it is made clear that the exemption would apply only, if, the said goods, which would be steel and cement, are used in the construction of houses, which would include temporary shelters. These houses, or, temporary shelters could be built by Non-Governmental Organization or Voluntary Agency or via Private-Public Enterprise or Rehabilitation Organization or Trust or any agency approved by the concerned State or Union Territory Government. Upon the notification being read in the manner, as indicated above, the only conclusion one can reach, is that, it envisages reimbursement of duty paid on cement and steel used in the construction of tsunami affected houses and/or temporary shelters. Appeal dismissed - decided against appellant.

Summary

Issues:
Interpretation of Notification No.32/2005-CE for refund of duty paid on cement and steel used in construction of houses for Tsunami affected persons.

Analysis:
The judgment involved multiple appeals challenging the interpretation of Notification No.32/2005-CE regarding the refund of duty paid on cement and steel used in constructing houses for Tsunami affected individuals. The key issue revolved around whether the refund should be limited to duty paid on cement and steel or whether it should be based on a percentage of the construction cost per house. The appellant argued that the authorities restricted the refund to the duty paid on cement and steel, contrary to the provisions of the Notification and subsequent amendments. On the other hand, the Revenue contended that the refund should be limited to the duty paid on cement and steel as per the Notification and relied on the lower authorities' orders for support.

The Notification exempted cement and steel used in construction of houses in Tsunami affected areas from the duty of excise leviable under the Central Excise Act. It specified that the exemption applied only if the goods were used for construction by approved agencies and outlined the procedure for claiming a refund. The appellant emphasized clause 3(d) of the Notification, arguing for a refund based on a percentage of the construction cost per house. However, the court noted that clause 5 of the Notification limited the exemption to duties paid on cement and steel used in houses constructed between specific dates.

The court analyzed the Notification and concluded that the purpose was to reimburse duty paid on cement and steel used in constructing Tsunami affected houses, not to provide a percentage-based refund on the construction cost. The judgment upheld the interpretation that the refund should be based on duty paid on cement and steel, as specified in the Notification. Consequently, the court dismissed the appeals in favor of the Revenue and against the appellant, emphasizing that the Notification aimed at reimbursing duty paid on specific materials for the designated purpose.

In summary, the judgment clarified the interpretation of Notification No.32/2005-CE regarding the refund of duty paid on cement and steel for constructing houses in Tsunami affected areas. The court affirmed that the refund should be limited to duty paid on cement and steel, as outlined in the Notification, rather than being calculated based on a percentage of the construction cost per house.