2024 (10) TMI 1538 - AT - Central Excise

Refund claim - goods supplied to Mega Power Projects exempt from payment of Central Excise Duty - Department has rejected the refund claim of the appellant observing that the appellant have failed to fulfill the conditions has provided under Sr. No. 28 of exemption N/N. 31/2010-CE dated 28th July, 2010 - HELD THAT - It is found from the record of the appeal, that the appellant has supplied EOT cranes to M/s. Larsen and Toubro under the invoice reference dated 18th November, 2010. It s matter of record that the EOT cranes sold by the appellant were meant for the Amrawati Power Projects. The perusal of the documents make it clear that the goods were meant for setting above Mega Power Project and the necessary undertaking as required under condition no. 28 of the exemption Notification no. 31/2010 dated 28th July, 2010 has been complied with. The appellant have complied with condition no. 28 of the exemption Notification and they are entitled for refund of the Central Excise Duty. Reliance also placed upon the Hon ble Supreme Court Decision in case of the M/S BONANZA ENGINEERING CHEMICAL PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE 2012 (3) TMI 69 - SUPREME COURT where it was held that ' merely because the assessee, may be, by mistake pays duty on the goods which are exempted from such payment, does not mean that the goods would become goods liable for duty under the Act. Secondly, merely because the assessee has not claimed any refund on the duty paid by him would not come in the way of claiming benefit of the Notification No. 175/86-C.E., dated 01.03.1986.' The impugned order-in-appeal is without any merit and is set aside - appeal allowed.

Summary

Issues:
Refund claim under Central Excise Act, 1944 for payment of Central Excise Duty on EOT cranes supplied to Mega Power Project.

Analysis:
The case involved the appellant, engaged in manufacturing EOT cranes, filing a refund claim of Rs.7,15,026 under section 11B of the Central Excise Act, 1944. The appellant claimed that they mistakenly paid Central Excise Duty on goods supplied to a Mega Power Project, which were exempted from duty under specific conditions. The department rejected the claim, stating non-compliance with the exemption conditions. The Commissioner (Appeals) also denied the refund. The appellant argued compliance with condition No. 28 of the exemption notification and cited a Supreme Court decision in their favor.

Upon review, it was found that the appellant had indeed supplied EOT cranes for the Mega Power Project and had fulfilled the conditions of the exemption notification. The necessary undertaking was provided by the Chief Executive Officer of the project, ensuring the goods' use only for the project. The Tribunal concluded that the appellant complied with the exemption conditions and was entitled to the refund. The decision was supported by the Supreme Court's ruling in a similar case.

The Tribunal emphasized the strict construction of exemption provisions, citing relevant legal precedents. It highlighted that once ambiguity about applicability is resolved, a wider and liberal interpretation should be applied to exemption clauses. The judgment emphasized avoiding inequitable results and incongruities in interpreting exemption notifications. In light of these principles and the specific facts of the case, the Tribunal overturned the impugned order-in-appeal and allowed the appellant's appeal.

In conclusion, the appeal was allowed, and the impugned order-in-appeal was set aside. The Tribunal's decision was based on the appellant's compliance with the exemption conditions and the legal principles governing the interpretation of exemption provisions. The judgment was pronounced in open court on 23rd October 2024.