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TMI Blog2013 (10) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion System Project", which according to the appellant, was a project approved by the Government of India and financed by Japan Bank International Cooperation (JBIC). The project implementing authority was APTRANSCO. Under Notification No. 108/95-C.E., dated 28-8-1995, the goods supplied to United Nations or International Organizations for their official use or supplied to the projects financed by the said United Nations or International Organizations and approved by the Government of India, are fully exempt from the central excise duty leviable under Section 3 of the Central Excise Act, 1944 and additional duty of excise leviable under Additional Duty of Excise (Goods Special Importance) Act, 1957 subject to certain conditions as mentioned in the notification. In case of Central Govt. project, financed by an International Organization, other than those specified in the Annexure to the notification, a certificate issued by the project implementing authority and countersigned by an officer not below the rank of Joint Secretary to the Govt. of India in the concerned "live ministry", as defined in the notification is required to be produced before the concerned Assistant/Deputy Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02. Both the show cause notices were issued under proviso to Section 11A(1) and besides the duty, the SCNs also sought recovery of the interest thereon and imposition of penalty on M/s. Jyoti under Section 11AC and on APTRANSCO under Rule 26 of the Central Excise Rules, 2002. 1.3 Both the show cause notices were adjudicated by the Commissioner of Central Excise, Raipur vide order-in-original dated 28-9-2005 by which the Commissioner holding that the supplies made by M/s. Jyoti to APTRANSCO were not eligible for duty exemption under Notification No. 108/95-C.E. and that M/s. Jyoti have suppressed the relevant information from the department with intention to evade the payment, confirmed both the duty demands under Section 11A of the Central Excise Act, 1944 and imposed penalty of equal amount i.e. Rs. 2,57,97,493/- on M/s. Jyoti, Besides this, penalty of Rs. 25 Lakh was also imposed on APTRANSCO under Rule 26 of the Central Excise Rules, 2001. Against this order of the Commissioner, these two appeals have been filed by M/s. Jyoti and M/s. APTRANSCO. 2. Heard both the sides. 3. Shri Mayur Shroff, ld. Counsel for M/s. Jyoti, pleaded that the goods, in question, had been supplied to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Simhadri-Vizag Transmission project had been approved by Govt. of India, that for this reason only, APTRANSCO as project implementing authority had issued the required certificates which had been countersigned by the Secretary to the Government of Andhra Pradesh, that in these circumstances, APTRANSCO had no reason to even suspect that JBIC which had financed the project, is not notified as International Organization, that in view of these circumstances, no penalty is imposable on them under Rule 26 of the Central Excise Rules, 2002, which, in any case, is not applicable to them as APTRANSCO had not dealt with the goods in respect of which they had reason to believe that the same were liable for confiscation. He, therefore, pleaded that the impugned order imposing penalty under Rule 26 of the APTRANSCO is not sustainable. 5. Ms. Ranjana Jha, learned Joint CDR, defended the impugned order by reiterating the findings of the Commissioner in it and pleaded that it is not disputed that JBIC is not an International Organization and hence, the Simhadri Project financed by JBIC, which was implemented by APTRANSCO as Project implementing Authority, was not eligible for supply of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eant for use in the implementation of the project. In case the project is being implemented by the State Government, the required certificate issued by the project implementing authority is required to be countersigned by the Principal Secretary or Secretary (Finance) to the State Government. In this case, APTRANSCO, which is a Government of Andhra Pradesh undertaking is the project implementing authority for a Simhadri Project and had issued the certificates certifying that the goods being sourced from M/s. Jyoti are meant for this project, which is approved by Government of India and is financed by JBIC as an organization and this certificate had been countersigned by a Secretary (1F) to the Government of Andhra Pradesh. Against such certificates, M/s. Jyoti had made duty free clearances of the goods. It is only subsequently that C.B.E. & C. informed that JBIC is not an International Organization within the meaning of this term as defined in this notification. This fact is not challenged by the appellants. In view of this, we hold that the goods cleared by M/s. Jyoti for use in the project being financed by JBIC would not be eligible for duty exemption. 9. As regards the questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would survive. As regards the cum-duty benefit, M/s. Jyoti had cleared the goods by availing full duty exemption under Notification No. 108/95-C.E., in view of the judgment of the Apex Court in case of M/s. Amrit Agro Industries v. CCE reported in 2007 (210) E.L.T. 183 (S.C.), there is no justification for abatement of the duty which had not been paid at all. 10. As regards the penalty of Rs. 25 Lakh imposed on APTRANSCO imposed under Rule 26, the penalty under this Rule is imposable on any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner dealing with any excisable goods which he know or had reason to believe are liable to confiscation under the provision of Central Excise Act, 1944 or these rules made thereunder. In this case, there is absolutely no evidence that APTRANSCO had knowledge that JBIC financing the Simhadri project - is not an International Organisation in terms of the definition of this term as given in exemption Notification No. 108/95-C.E. Moreover, the duty exemption certificates signed by APTRANSCO had also been countersigned by the Secretary to ..... 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