2007 (10) TMI 182 - AT - Central Excise

Not. 108/95 granted total exemption from payment of duty of Excise in respect of goods when supplied to projects financed by the U.N. or an international organisation and approved by the GOI benefit of notification cannot be denied merely for reason that goods were not directly supplied to the project implementing authority but supplied to a contractor or a sub-contractor engaged to implement the project - all other conditions of Not. 108/95 duly complied exemption available

Summary

Issues:
1. Interpretation of Notification No. 108/95-CE dated 28-8-1995 regarding exemption from Excise duty for goods supplied to projects financed by international organizations approved by the Government of India.
2. Denial of benefit of the Notification due to goods not being directly supplied to the project implementing authority.

Analysis:
1. The key issue in this case was the interpretation of Notification No. 108/95-CE dated 28-8-1995, which granted total exemption from payment of Excise duty for goods supplied to projects financed by international organizations approved by the Government of India. The condition for exemption required the manufacturer to produce a certificate from the project implementing authority, as well as approval from the Government of India. In this instance, the goods were supplied to a project financed by the International Development Association and approved by the Government of India. The certificate was issued by the Principal Secretary of the Health and Family Welfare Department, Government of West Bengal, confirming the project details and the intention to procure goods without duty payment. The jurisdictional officer accepted the certificate, extending the benefit of the Notification to the goods supplied. The appeal arose when the department filed an appeal with the Commissioner (Appeals) challenging this decision.

2. The impugned order denied the benefit of the Notification to the assessee on the grounds that the goods were not directly supplied to the project implementing authority. However, the Tribunal noted that similar objections had been raised in previous cases where it was held that as long as all other conditions of the Notification were met, the benefit should not be denied solely on the basis of direct supply to the project implementing authority. The Tribunal emphasized that the Notification did not explicitly require direct supply to the project authority. Since the appellants had complied with all substantive conditions of the Notification, the Tribunal found no valid reason to deny the benefit. The lower appellate authority had overlooked this interpretation, leading to the appeal being allowed in favor of the assessee.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal, emphasizing that the benefit of the Notification should not be denied based solely on the lack of direct supply to the project implementing authority when all other conditions were met.