The Tribunal examined whether steel doors supplied to a research institute qualified under Notice No. 10/97-CE. Finding the goods did not match the description and the institute lacked DSIR registration, the Court confirmed duty and interest but set aside the penalty due to the appellant's bonafide belief.
Demand and interest confirmed; Penalty set aside.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
Appeal No. E/711/2009
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Division Bench Court – I
Appeal No. E/711/2009
(Arising out of Order-in-Appeal No. 16/2009 (H-IV) CE dated 28.04.2009 passed by Commissioner of Customs, Central Excise & Service Tax (Appeals-II), Hyderabad)
M/s Shakti Met-Dor Limited
…..Appellant(s)
Vs.
Commissioner of Central Excise, Customs & Service Tax, Hyderabad - II
…..Respondent(s)
Appearance
Shri Lalit Mohan Chandna, Advocate for the Appellant. Shri Guna Ranjan, Superintendent (AR) for the Respondent.
Coram:
Hon’ble Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL)
Hon’ble Mr. P. VENKATA SUBBA RAO, MEMBER (TECHNICAL)
Date of Hearing: 23/05/2018 Date of Decision: 23/05/2018
FINAL ORDER No. A/30604/2018
[Order per: P. Venkata Subba Rao]
The appellants are manufacturers of steel doors with frames and they sold such doors valued at Rs. 6,60,829/- to Veterinary Biological & Research Institute, Hyderabad under the
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Department of Animal Husbandry, Government of Andhra Pradesh, claiming exemption in terms of Notification No. 10/1997- CE dated 01.03.1997. A Show Cause Notice was issued to the appellant seeking to deny the benefit of this notification and demanding duty on the aforesaid doors under Section 11A (1) read with Rule 8 of the Central Excise Rules, 2002. It was also proposed to demand interest and imposed penalty on the appellant. The allegation in the show cause notice is that the notification No. 10/1997 is not applicable to them as their goods do not fall under the following categories which alone are eligible for the benefit of the notification:
It was alleged that the steel doors with frames which they are cleared do not fit any of the goods described above and the appellant also has not fulfilled the conditions specified in the column 4 in the Notification.
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the appellant filed an appeal with the Commissioner (Appeals) who dismissed the appeal and upheld the Order-in-Original. This appeal is against this order of Commissioner (Appeals).
Notification: 10/97 – CE dated 01-Mar-1997
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.
TABLE
| S. No. |
Name of the Institutions |
Description of the goods |
Conditions |
|---|---|---|---|
| (1) | (2) | (3) | (4) |
| 1. | Public funded research institution or a university or an Indian Institute of Technology or Indian Institute of Science, Bangalore or a Regional Engineering College, other than a hospital |
a) Scientific and technical instruments, apparatus, equipment (including computers); (b) Accessories and spare parts of goods specified in (a) above and consumables; (c) Computer software, Compact Disc-Read Only Memory(CD- ROM), recorded magnetic tapes, microfilms, microfiches; (d) Prototypes |
i)If the institutions- a) is a public funded research institution under the administrative control of the Department of Space or Department of Atomic Energy or the Defence Research Development Organisation of the Government of India and produces a certificate to that effect from an officer not below the rank of a Deputy Secretary to the Government of India in the concerned department to the manufacturer at the time of clearance of the specified goods; or b) is registered with the Government of India in the Department of Scientific and Industrial Research and the manufacturer produces at the time of clearance, a certificate from the Head of the institution in each case, certifying that the said goods are required for research purposes only. ii) The aggregate value of prototypes received by an institution does not exceed fifty thousandrupees. |
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It is not in dispute that the buyer of the steel doors with frames is public funded research institute as it is an institution of Government of Andhra Pradesh. The issues in dispute are (a) whether these doors can be called Scientific and technical instruments, apparatus, equipment, accessories and spare parts of goods etc., and (b) whether the appellant has fulfilled the conditions in column (4) of the notification, in particular condition (i)(b). They have supplied the doors to the research institution which had certified that the doors were required for animal vaccine production. Later, they give another certificate that they were used for animal vaccine research purpose. The appellant claims that hence they are entitled to a benefit of the notification. The Revenue, on the other hand contends that the goods in question are not scientific and technical instruments or accessories etc., and are merely doors, supplied to the research institution and since the description of the goods does not match with the notification the appellant is not entitled to the benefit of notification. It is their further submission that, there is nothing on record to show that the buyer is registered with the Department of Scientific and Industrial Research (DSIR) of the Government of India at the time of clearance of the goods and therefore the condition specified in the notification is also not fulfilled. Thus neither the goods are covered by the notification nor is the condition fulfilled.
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institute being registered that DSIR was also not fulfilled. We therefore, find the demand is sustainable and interest thereon is payable. However, there were reasonable grounds for the appellant to be under the bonafide belief that they were eligible to avail the exemption notification and hence we find that the penalty is liable to be set aside.
(Operative part of this order was pronounced in open court on conclusion of hearing )
P. VENKATA SUBBA RAO M.V. RAVINDRAN MEMBER (TECHNICAL) MEMBER (JUDICIAL)
Lakshmi….
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3 issues framed by the court
Whether the appellant is entitled to the benefit of Notification No. 10/1997-CE for steel doors supplied to a public funded research institution.
Whether the buyer institution was duly registered with the Department of Scientific and Industrial Research (DSIR) as required by the notification conditions.
Whether the imposition of penalty on the appellant had sufficient cause due to bonafide belief in exemption eligibility.
Colour shows how this judgement treated each authority
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[2007 (208) ELT 143 (Tri.-Bang.)]
Featherlite Products Pvt. Ltd.Referred¶4
[2016 (339) ELT A295 (S.C.)]
Inductotherm (India) Pvt. Ltd.Referred¶4
[2009 (240) ELT 565 (Tri. – Ahmd.)]
Blue Star Ltd.Distinguished¶6
[2016 (336) ELT 190 (Tri. – Mumbai)]
Godrej Appliances Ltd.Distinguished¶6
[2009 (236) ELT 729 (Tri. Ahmd.)]
H& R Johnson India Ltd.Referred¶5
[2008 (232) ELT 466 (Tri- Mumbai.)]
Tamil Nadu Petro Products LimitedDistinguished¶6
[2009 (244) ELT 235 (Tri. – Chennai)]
3 provisions across 3 enactments
M/s Shakti Met-Dor Limited
Commissioner of Central Excise, Customs & Service Tax, Hyderabad - II
M.V. RAVINDRAN
P. VENKATA SUBBA RAO
As recorded by the court registry
An appeal in a central excise matter before CESTAT.
Judgements on the same questions, provisions and authorities, from every court
