CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL,
WEST ZONAL BENCH : AHMEDABAD
REGIONAL BENCH – COURT NO. 3
EXCISE Appeal No. 11372 OF 2014-DB
[Arising out of Order-in-Original/Appeal No VAP-EXCUS-000-APP-435-436-13-14 dated 03.01.2013 passed by Commissioner of Central Excise, Customs and Service Tax-VAPI]
Grauer & Weil India Limited
VERSUS
Commissioner of Central Excise & ST, Vapi
AND
EXCISE Appeal No. 11373 OF 2014-DB
[Arising out of Order-in-Original/Appeal No VAP-EXCUS-000-APP-435-436-13-14 dated 03.01.2013 passed by Commissioner of Central Excise, Customs and Service Tax-VAPI]
Mahendra Bhurat …. Appellant
G M Finance And Authorised Signatory
M/s, Grauer & Weil India Ltd Plot No. 10, Survey No. 215/1, Village : Dadra, SILVASSA,
U T OF DADRA & NAGAR HAVELI
VERSUS
Commissioner of Central Excise & ST, Vapi Respondent
4th Floor, Adharsh Dham Building,
Opp. Town Police Station, Vapi-Daman Road, Vapi, Gujarat-396191
APPEARANCE :
Shri Jagdish Surti, Advocate for the Appellant
Shri Rajesh K Agarwal, Superintendent (AR) for the Respondent
CORAM: HON’BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) HON’BLE MR. C.L. MAHAR, MEMBER (TECHNICAL)
DATE OF HEARING : 24.04.2023 DATE OF DECISION: 26.07.2023
FINAL ORDER NO. 11612-11613/2023
C.L. MAHAR :
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.
- It has been the contention of the department that the appellant arenot 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:
- 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.
- 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.
- 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 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.
- 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.
- 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.
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 |
(a) Scientific and technical instruments, apparatus,
equipment (including |
(i) If the institution –(a) is a public
funded research |
| Institute of Technology or Indian Institute of Science, Bangalore or a Regional Engineering College, other than a hospital | 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 |
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 thousand rupees. |
| 2. | Non-commercial research institutions, other than a hospital | (a) Scientific and technical instruments, apparatus,
equipment (including computers); |
(i) the institution is registered with the Government of
India in the Department of Scientific and Industrial Research; |
| (b) accessories and spare
parts thereof and consumables; (c) computer software, Compact Disc-Read Only Memory (CD-ROM), recorded magnetic tapes, microfilms, microfiches. (d) Prototypes |
(ii) an officer not
below the rank of a Deputy Secretary to the Government of India in the said Department certifies in each case that the institution is not engaged in any commercial activity and that the said goods are required for research purposes only; (iii) the goods are covered by a Pass- book issued by the said Department; (iv) the aggregate value of goods received under this exemption by an institution does not exceed rupees two crores in the case of consumables, rupees fifty thousand in the case of prototypes and rupees five crores in other cases, in a financial year. |
Explanation. – For the purposes of this notification, the expression, –
- “Public funded research institution” means a research institution in the case of which not less than fifty per cent of the recurring expenditure is met by the Central Government or the Government of any State or the administration of any Union territory;
- “University” means a university established or incorporated by or under a Central, State or Provincial Act and includes –
- an institution declared under section 3 of the University Grants Commission Act, 1956 (3 of 1956) to be a deemed university for the purposes of that Act;
- aninstitution declared by Parliament by law to be an institution of national importance;
- acollege maintained by, or affiliated to, a University;
- “Head”means –
- inrelation to an institution, the Director thereof (by whatever name called);
- inrelation to a University, the Registrar thereof (by whatever name called);
- inrelation to a college, the Principal thereof (by whatever name called);
- “hospital” includes any Institution, Centre, Trust, Society, Association, Laboratory, Clinic or Maternity Home which renders medical, surgical or diagnostic treatment.
[Notification No. 10/97-C.E., dated 1-3-1997]
It can be seen from the serial No.2 of in the notification above that in the description of goods which are exempted from the payment of Central Excise duty, one of the items under 2(b) reads as follows:-
(b) accessories and spare parts of goods specified in (a) above and consumables”
The product which is manufactured by the appellant is nothing but Metal Finishing Chemical/ Electroplating salt which are consumables for various Electronic and Scientific institutions. We are of the view that products manufactured by the appellant are covered under the category of consumables as mentioned in the Notification No. 10/97-CE dated 01.03.1997 at serial No. 2(b).
- During the hearing learned Advocate has taken us through various certificates which have been issued by premier research Institutes Bhabha Atomic Research Centre, Space Application Centre, ISRO Satellite Centre, Central Electronics Engineering Research, Electronics and Radar Development,National Aerospace Laboratories, Naval Dockyard We are
convinced that the requirement of the Notification No. 10/97-CE is fully satisfied by the appellant and thus they are entitled for the benefit of the exemption notification. We also take note of the fact that even if there is a small lacuna on the part of the authority signing the certificates cannot be considered as infringement of compliance with the requirement of proper submission of certificates and substantial benefit cannot be denied on this ground. However, since there is no denial of the fact that goods have been supplied to research institutions and proper certificates have been issued by the authorities of such institutions, the benefit of the exemption notification cannot be denied to the appellant.
- In view of above, we find no merit in the order-in-
Consequently, the personal penalty imposed on the Shri Mahendra Bhurat, GM of the appellant Company is also set-aside. Accordingly the impugned orders are set-aside and the appeals are allowed.
(Pronounced in the open court on 26.07.2023)
(Ramesh Nair) Member (Judicial)
(C L Mahar) Member (Technical)
KL
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