2018 (10) TMI 1539 - AT - Central Excise

Benefit of exemption N/N. 10/97-CE, dated 01.03.1997 denied - invocation of extended period of limitation - Essentiality Certificate not issued by Registrar - Clearances made for non-research of dual purpose - Purpose not mentioned in the certificate - No evidence that the Institutions are registered with DSIR. Held that - The original authority has taken a broader view of the intent of the exemption notification No. 10/97 and allowed the benefit of notification while admitting that some documents as required under notification such as Registration Certificate of DSIR or the specific purpose for which equipment is supposed to be used were missing. In view of the law laid down by Hon ble Apex Court in the case of Dilip Kumar & Company 2018 (7) TMI 1826 - SUPREME COURT OF INDIA , the entitlement of the exemption notification has to be examined and strictly consider with reference to each of the clearances which requires detailed examination of the documents - this is a fit case to be remitted back to the original authority for reexamination in the light of the laws laid down by Hon ble Apex Court in the case of Dilip Kumar & Company and Others - appeal allowed by way of remand.

Summary

Issues:
1. Interpretation of exemption notification No. 10/97-CE.
2. Compliance with conditions for exemption.
3. Competence of authorities issuing essentiality certificates.
4. Purpose of equipment usage.
5. Evidence of registration with DSIR.

Analysis:

Interpretation of Exemption Notification:
The appeal involved a dispute regarding the interpretation of exemption notification No. 10/97-CE. The Ld. Commissioner/AR argued that exemptions should be strictly construed against the party claiming them, citing a precedent from the Supreme Court. The original authority had allowed the exemption, leading to the Revenue's appeal.

Compliance with Conditions for Exemption:
The original authority partly dropped demands on merits and limitation but confirmed demands related to specific issues. The Revenue appealed against the dropped demands. The Ld. Counsel for the respondent argued that previous decisions favored them, and the appeal should be rejected.

Competence of Authorities Issuing Essentiality Certificates:
The original authority confirmed demands related to issues like essentiality certificates issued by incompetent authorities and clearances made without essentiality certificates. However, the appellate tribunal had already decided on these issues in a previous order, which was not appealed against, bringing finality to those matters.

Purpose of Equipment Usage:
The original authority examined cases where the purpose of equipment usage was not explicitly mentioned in the certificate. Despite missing details, the authority allowed exemptions based on references to the relevant notification.

Evidence of Registration with DSIR:
Cases where there was no evidence of institutions being registered with DSIR were also considered. The original authority granted the benefit of the notification based on procurement orders mentioning registration numbers, even though the registration certificate was missing.

Conclusion:
The appellate tribunal remitted the matter back to the original authority for a detailed reexamination in light of the Supreme Court's precedent. The decision highlighted the need for a thorough review of documents to determine entitlement to the exemption notification. The appeal was disposed of accordingly, with specific issues already decided by the tribunal in a previous order being excluded from further consideration.