2019 (5) TMI 205 - AT - Central Excise

Benefit of N/N. 64/1995-CE dt. 16/03/1995 - Supply of goods for use in construction of war ships in Indian Navy - denial of exemption on the ground that they have not supplied the goods to Indian Navy thereby not complied with the provisions of Notification No.64/1995 - HELD THAT - The said notification was amended vide Notification No.24/2002-CE dt. 11/04/2002 and a new Sl.No.21 was introduced wherein it is clearly mentioned that the exemption is applicable to all goods supplied for use in construction of warships of the Indian Navy. Further the only condition stipulated was that before clearance of the said goods, a certificate from an officer not below the rank of a Rear Admiral of the Indian Navy or of any other officer of the Indian Navy equivalent to the Joint Secretary to the Government of India, to the effect that the said goods are intended for the said use, is produced to the proper officer. This condition has been fulfilled by the assessee by producing the certificate from the competent authority to the Department vide their letter dt. 04/11/2010. Division Bench of this Tribunal in identical facts in the case of GE INDIA INDUSTRIAL LTD. VERSUS COMMR. OF C. EX., CUS. S.T., BANGALORE-I 2016 (1) TMI 1138 - CESTAT BANGALORE has examined whether the assessee is entitled to be benefit of Notification No.64/95-CE or not. The assessee is entitled to the benefit of exemption notification and the Commissioner has rightly given them the benefit of the Notification by dropping the demand - appeal dismissed - decided against Revenue.

Summary

Issues:
Identical issues in two appeals regarding the entitlement to exemption under Notification No.64/1995-CE for goods supplied for construction of warships to shipbuilders.

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore involved two appeals concerning the entitlement to exemption under Notification No.64/1995-CE for goods supplied for the construction of warships to shipbuilders. The Commissioner of Central Excise had confirmed a demand against the assessee under the Central Excise Act, 1944, for a specific period. The assessee contended that the impugned order was contrary to binding judicial precedent and wrongly relied on a previous case regarding exemption for goods supplied to shipbuilders. The assessee argued that the exemption notification was applicable to goods supplied for the construction of warships for the Indian Navy, supported by certificates provided to the Department. The Department alleged non-compliance with rules and imposed penalties. The Tribunal noted the differences in the cited case law and the specific conditions of the exemption notification, emphasizing that goods supplied for the construction of warships were eligible for exemption, regardless of direct supply to the Indian Navy.

The Tribunal referenced a previous decision involving similar facts to support the assessee's position, concluding that the impugned order was unsustainable in law. The Department's appeal was dismissed as the assessee was rightfully granted the benefit of the exemption notification. The Tribunal upheld the assessee's appeal and dismissed the Revenue's appeal, setting aside the impugned order and confirming the entitlement to the exemption. The judgment clarified the interpretation of the exemption notification and highlighted the fulfillment of conditions for exemption, ultimately ruling in favor of the assessee based on established legal principles and factual evidence presented during the proceedings.