Case Law Details

Case Name : Commissioner of Central Excise, Jaipur Vs. KamdhenuIspat Ltd.
Appeal Number : [(2014) 51 taxmann.com 227 (New Delhi - CESTAT)]
Date of Judgement/Order :
Related Assessment Year :

Excise duty exemption cannot be denied merely because the certificates were in the name of intermediary through whom the material was supplied for approved projects

KamdhenuIspat Ltd.(the Assessee)is a manufacturer of mild stone CTD Bars. For the period from April 2003 to June 2004, the Assessee supplied the CTD Bars for use in certain Projects financed by Asian Development Bank (ADB) and being implemented by Rajasthan Urban Infrastructure Development Project, Jaipur (RUIDP).

The Assessee also submitted certificates issued by project Director, RUIDP, Jaipur, countersigned by Additional Chief Secretary (Finance) Govt. of Rajasthan, certifying that the material mentioned in the certificate is required for use of the projects, and that the project have been financed by ADB through loan, duly approved by Govt. of India for urban infrastructure development of six major cities of the state of Rajasthan.

Accordingly, the Assessee availed exemption from Excise duty under Notification No. 108/95-CE dated August 28, 1995 (“the Exemption Notification”).

However, the Adjudicating Authority denied the benefit of the Exemption Notification on the premise that the Assessee’s name is not mentioned as supplier of the material in the certificates and the goods have not been supplied directly to the ADB financed Projects. Thus, demand was confirmed against the Assessee along with interest and penalty.

Being aggrieved, the Appellant preferred an appeal before the Commissioner (Appeals) where the matter was decided in favour of the Assessee. Thereafter, aggrieved by the Order of the Commissioner (Appeals), the Revenue preferred an appeal before the Hon’ble CESTAT, Delhi.

The Hon’ble CESTAT, Delhi relying upon the decision of the Hon’ble High Court of Madras in case of CCE Vs. Caterpillar India (P.) Ltd.[2013(297) ELT 8],held that since it is not denied that the Assessee have supplied the material to the persons mentioned in the certificates and there is no allegation of diversion of the material supplied for any other purpose, the benefit of the Exemption Notification cannot be denied on supply of products to projects funded by ADB even if routed via intermediary..

(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)

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