Grauer & Weil India Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)
Introduction: In the case of Grauer & Weil India Limited against the Commissioner of Central Excise & ST (CESTAT Ahmedabad), The dispute revolves around the eligibility of Metal Finishing Chemicals and Electroplating Salts for exemption under Notification No. 10/1997-CE. The appellant claims to qualify under the consumables category for research institutions. The CESTAT Ahmedabad order discusses the findings and implications of the case.
Analysis: Grauer & Weil India Limited is engaged in manufacturing Metal Finishing Chemicals and Electroplating Salts. The appellant cleared their products to various research institutions while claiming exemption under Notification No. 10/1997-CE. However, the department contended that these goods did not fall under the specified category in the notification, and demanded Central Excise duty of Rs. 30,25,972. The show cause notice raised issues of eligibility and proper certification.
The appellant argued that their products were consumables for research institutions, making them eligible under the consumables category mentioned in the notification. They presented valid certificates issued by competent authorities to support their claim. The appellant challenged the invocation of extended time proviso under Section 11A of the Central Excise Act, 1944, and the imposition of penal provisions under Section 11AC.
The CESTAT Ahmedabad referred to Notification No. 10/1997-CE and noted that Metal Finishing Chemicals and Electroplating Salts fell under the consumables category specified in 2(b) of the notification. The appellant’s products were intended for use in research institutions, and valid certificates were submitted. The CESTAT ruled in favor of Grauer & Weil India Limited, granting them exemption benefits.
Conclusion: The CESTAT Ahmedabad order concludes that Metal Finishing Chemicals and Electroplating Salts manufactured by Grauer & Weil India Limited qualify for exemption under Notification No. 10/1997-CE. The case highlights the importance of proper certification and adherence to notification provisions to avail benefits. The ruling provides clarity on the eligibility of such products as consumables for research institutions, ensuring fair treatment and compliance in the excise duty matters.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The brief facts of the matter are that the appellant are engaged in the manufacture of excisable goods namely Metal finishing Chemicals, Electroplating Salts classifiable under CETH 38249021 of Central Excise Tariff Act, 1985. The appellant have been clearing their product to various research Institutions like, Bhabha Atomic Research Centre, Space Application Centre, ISRO Satellite Centre, Central Electronics Engineering Research, Electronics and Radar Development, National Aerospace Laboratories, Naval Dockyard etc. claiming the benefit of Notification No. 10/1997-CE dated 01.03.1997.
2. It has been the contention of the department that the appellant are not entitled for the benefit of the Notification No. 10/1997-CE as Metal Finishing Chemical does not fall under the category mentioned in the Notification No. 10/1997-CE, accordingly the show cause notice came to be issued demanding Central Excise duty amounting to Rs. 30,25,972/-. The show cause notice has primarily sought to demand Central Excise duty on following two counts:
(i) The product Metal Finishing Chemical does not fall under the category of products mentioned in Notification No. 10/1997-CE dated 01.03.1997 therefore, the appellant is not qualify for exemption under the said notification.
(ii) In several cases either certificate has not been produced by the appellant or certificate have not been issued by the proper authority and thereby the appellant are not entitled for the benefit under Notification No. 10/1997-CE.
3. Learned Counsel appearing for the appellant submitted that Metal Finishing chemical and Electroplating salt are consumables for institutions which are engaged in the work of research and the same is governed under Serial No. 2(b) of Notification No. 10/97-CE which states that accessories and spare parts thereof and consumables. It has also been stressed by the learned Advocate that the appellant has submitted all valid certificates issued by the competent authorities and has subsequently mentioned that the appellants are entitled for the benefit of Notification No. 10/97-CE. It is vehemently argued by the learned Advocate that it is wrong on the part of the department to invoke extended time proviso under Section 11A of Central Excise Act, 1944 and since all the record, transactions have duly been recorded in the books of accounts and same has already been declared by them from time to time in monthly Central Excise returns and therefore alleging suppression of facts and invoking penal provisions under Section 11AC of Central Excise Act, 1944 is not legal and proper.
4. We have also heard learned Departmental Representative Shri Rajesh K Agarwal, Superintendent (AR) who reiterated the findings of the impugned order-in-original as well as order-in-appeal.
5. Before proceeding further we refer to Notification No. 10/97-CE dated 01.03.1997 which is reproduced:-
Exemption to specified goods supplied to specified institutions
In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in column (3) of the Table below 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, when supplied to the institutions specified in the corresponding entry in column (2) of the said Table, subject to the conditions specified in the corresponding entry in column (4) of the said Table.
