2023 (7) TMI 1116 - AT - Central Excise

Exemption to specified goods supplied to specified institutions - Denial on the ground that the product Metal Finishing Chemical does not fall under the category of products mentioned in Notification No. 10/1997-CE dated 01.03.1997 - denial also on the ground that certificate has not been produced by the appellant or certificate have not been issued by the proper authority - penalty on the Shri Mahendra Bhurat, GM of the appellant Company - HELD THAT - The product which is manufactured by the appellant is nothing but Metal Finishing Chemical/ Electroplating salt which are consumables for various Electronic and Scientific institutions - the products manufactured by the appellant are covered under the category of consumables as mentioned in the Notification No. 10/97-CE dated 01.03.1997 at serial No. 2(b). It is also that even if there is a small lacuna on the part of the authority signing the certificates cannot be considered as infringement of compliance with the requirement of proper submission of certificates and substantial benefit cannot be denied on this ground. However, since there is no denial of the fact that goods have been supplied to research institutions and proper certificates have been issued by the authorities of such institutions, the benefit of the exemption notification cannot be denied to the appellant. The personal penalty imposed on the Shri Mahendra Bhurat, GM of the appellant Company is also set-aside - Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are the entitlement of the appellant for the benefit of Notification No. 10/1997-CE and the demand of Central Excise duty by the department based on the classification of Metal Finishing Chemicals under the said notification.

Entitlement for Notification No. 10/1997-CE:
The appellant, engaged in the manufacture of Metal finishing Chemicals, claimed the benefit of Notification No. 10/1997-CE when supplying their products to research institutions. The department contended that the appellant did not qualify for the exemption under the notification as Metal Finishing Chemicals were not covered. The show cause notice demanded Central Excise duty on the grounds that the product did not fall under the specified category and that proper certificates were not produced. The appellant argued that their products were consumables for research institutions and fell under the category specified in the notification. They submitted valid certificates from competent authorities and contended that invoking penal provisions for alleged suppression of facts was not justified.

Interpretation of Notification No. 10/1997-CE:
The Tribunal referred to the Notification No. 10/1997-CE, which exempts specified goods supplied to specified institutions from Central Excise duty. The description of goods covered under the notification includes scientific and technical instruments, accessories, spare parts, consumables, computer software, and prototypes. The appellant's products, Metal Finishing Chemicals, were considered consumables for electronic and scientific institutions, falling under the category specified in the notification.

Compliance with Notification Requirements:
During the hearing, certificates issued by premier research institutions were presented, satisfying the requirements of the notification. The Tribunal acknowledged that even minor deficiencies in the certificates did not invalidate the appellant's entitlement to the exemption. As goods were supplied to research institutions with proper certificates, the benefit of the exemption notification could not be denied to the appellant.

Decision and Conclusion:
The Tribunal found no merit in the order-in-appeal and set aside the personal penalty imposed on the appellant's General Manager. The impugned orders were set aside, and the appeals were allowed, confirming the appellant's entitlement to the benefit of Notification No. 10/1997-CE. The judgment was pronounced in open court on 26.07.2023.