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TMI Blog2008 (9) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... Veeraiyan, Member (T) and P.K. Das, Member (J) Shri H.B. Ghirnikan, Consultant, for the Appellant. Shri Amit Jain, DR, for the Respondent. [Order per: Justice S.N. Jha, President]. - The dispute in these two appeals on behalf of Chhattisgarh State Electricity Board relates to eligibility for exemption under Notification No. 74/93-C.E., dated 28-2-1993. The said Notification provided for exemption from payment of central excise duty in respect of goods manufactured by a factory belonging to a State Government if such goods are intended for use by another Department of the State Government. A Division Bench of the Tribunal in CCE v. Electricity Poles Manufacturing, 2000 (121) E.L.T. 96 (Tribunal), has held that although not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gence of opinion on the point. 3. We may at this stage straightaway refer to Notification No. 74/93- C.E., dated 28-2-1993 so far as relevant, as under: "In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods of the description specified in column (2) of the Table hereto annexed and falling under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) from the whole of the duty of excise leviable thereon which is specified in the said Schedule: Provided that such goods are manufactured by a factory belonging to a State Government and such goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessarily mean that every authority which is a 'State' within the meaning of Article 12 of the Constitution of India is also a part or Department of the Government. Corporations and statutory authorities though 'State' are different from Government even if they are controlled and financed wholly or partly by the Government. Reference may be made to the cases of S.L. Agarwal v. Hindustan Steel Ltd., 1970 (1) SCC 177, R.D. Shetty v. International Airport Authority of india , 1979 (3) SCC 489, and Ajay Hasia v. Khalid Mujib, 1981 (1) SCC 722. 6. Following the said decisions, the Allahabad High Court in U.P. State Electricity Board v. Collector of Customs Central Excise, 1992 (61) E.L.T. 14 (All.) rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the Government but took the stand that the goods i.e. PCC Poles are intended for use by the Departments of the Government, such as, Public Works Department, Water Resource Department, Public Heath Engineering Department, Education Department, Women Children Welfare Department etc. Besides, it was stated, Gram Panchayats, Nagar Panchayats, Municipalities and Municipal Corporations which are "directly State" deriving their authority from the Constitution of India, also use the goods manufactured by the appellant Board. Thus as the intended user of the goods is invariably one or the other Department of the State Government, they qualify for exemption under the notification. The submission is totally misconceived. 7. The State Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he consumers pay some amount as security refundable at the stage of termination/cessation of the electric supply. The Government like any other consumer, therefore, cannot be regarded as user of the poles and it would thus follow that the subject goods are not manufactured for use by any Department of the Government. 8. As a matter of fact, on the admission of the appellant's representative that the Electricity Board is not a Department of the State Government, the benefit of exemption has to be denied, for, as seen above, the goods not only should be used by Departments of the concerned State Government, it should also be the manufactured in the factory belonging to a State Government. The status of the Electricity Board being differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions are satisfied exemption cannot be claimed. Admittedly, Chhattisgarh State Electricity Board is not a Department of the Government. Merely because 100% capital is owned by State Government does not make it a body at par with the State Government. Hence the PCC poles manufactured in the factories which admittedly belong to the Electricity Board does not qualify for exemption. That apart, the intended or actual user of the poles also being the Board itself, and not any Department of the State Government, the other condition is also not fulfilled. 11. In the result, the reference is answered in the negative and against the appellant. It is held that Chhattisgarh State Electricity Board is not a Department of the State Government s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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