News Update

PM sets up 5-Member Economic Advisory Council; Bibek Debroy to head itGSTR-3B hourly return-filing pattern for August indicates peak filing of 1.33 lakh on Sept 20 at 7 PM; About 37K filed even at midnight; 13.7 lakh returns filed on Sept 20: GSTNKandla renamed as Deendayal Port; Indian Ports Act amended and notifiedGovt to launch Mudra Promotion drive on Pan-India BasisGST - CBEC about to notify cross-empowerment for dividing assessee-basePM to address 175 young IAS officers working as Asst Secretaries at CentreGSTN approves 24.6 lakh Registration from July 1 till dateWorld’s heaviest woman Eman Ahmed A E Aty passes away at Abu Dhabi hospitalKharif production likely to surpass 134 million tonnes markKarti Chidambaram case - ED attaches properties of firm suspected to be having nexus with himRajiv Mehrishi assumes office as New CAGST - Greenhouse is building and, therefore, would fall under definition of plant - activity of installation of plant (greenhouse) is liable to service tax: CESTATIndia's Bullet Train with Japanese Aid Tramples Fiscal Transparency (See 'Special' in TII)Centre to launch Neighbourhood Action Plan for better solid waste managementST - Financial advisory services provided by CRISIL does not fall under category of 'Management Consultancy Services' : High CourtImpact Analysis of GSTI-T - Reopening notice can be issued to dissolved firm, for not filing I-T Returns, if sizable cash loan transactions proves existence of firm during relevant period: HCST - Service of drilling and blasting alone does not fall under dredging service: CESTATCX – Adjudicating Authority should not be sympathetic to relieve defaulter from violation of law without penalty: CESTATGerman elections - Merkel captures powers for 4th timeFM assigns task to Chief Economic Adviser to finalise booster dose for economyPetrol prices will be reduced shortly, says Petro MinisterHealth Minister thanks PM for approving AIIMS at Bilaspur in HPCII favours further extension of GSTR-1, 2 & 3Thread of Mann Ki Baat integrates every section of society: PMCommerce Minister meets top honchos of Korean MNCsGSTR - 3B for July if submitted but not FILED can be done now: GSTN
 
CX - Notfn 11/97 amending Notfn. 67/95 for exemption to intermediate products used in manufacture of goods supplied under exemption to Intl Organization as per Notfn. 108/95 is to be considered clarificatory in nature - Appeal allowed: CESTAT

By TIOL News Service

MUMBAI , SEPT 20, 2013 : NOTIFICATION No. 108/95-CE dated 28.8.95 exempted all goods falling under the Schedule to the CETA, 1985 when supplied for the official use of United Nations or International Organisation or for the projects funded by United Nations or an International Organization and approved by the Govt. of India.

Rule 57C of the CER, 1944 prevailing during February 1997 provided for disallowance of Modvat credit when final product was exempted from duty. However, exception was made in respect of supplies made in terms of Notification No. 108/95-CE dated 28.8.95. The appellants were, therefore, entitled for Modvat credit of duty paid on the components used in the manufacture of motor vehicles supplied to United Nations or International Organizations.However, the captive consumption NotificationNo.67/95-CE dated 16.3.95 did not mention about clearances of the final product to the International Organization, whom the appellants were supplying.

Nonetheless, an amendment came by virtue of Notification No.11/97-CE, dated 01.03.1997 including these International Organizations.

In the present case, the period involved is of February, 1997 and the Department demanded the duty on the intermediate products utilized in the final products cleared under exemption 108/95-CE. The lower authorities confirmed the demand.

Before the CESTAT, it is submitted that the subsequent amendment is to be given effect retrospectively even for the month of February 97 also inasmuch as the situation of Revenue neutral; that the Notification No. 11/97-CEdt. 1.3.97 is clarificatory in nature to the Notification No. 108/95 dt. 28.8.1995. Reliance is placed on the decision in Premier Tyres Ltd.( 2003-TIOL-55-HC-KERALA-CX ) .

The Revenue representative reiterated the order passed by the lower authority and submitted that the Notification No. 11/97-CE cannot be given retrospective effect and, therefore,the appeal should be dismissed.

The Bench observed -

"7. Considering the submissions made by both sides and after examining the issue before us. We find that as per Rule 57C, the credit of duty was not allowed if final products are exempted but which reproduced hear as under:

“Rule 57C. Credit of duty not to be allowed if final products are exempt.- No credit of the specified duty paid on the inputs used [in the manufacture of a final product (other than those cleared either to a unit in a Free Trade Zone or to a hundred percent Export-Oriented Unit)] [ or unit in an Electronic Hardware technology Park or to a unit in Software Technology Parks] [or supplied to the United Nations or an international organization for their official use or supplied to projects funded by them, on which exemption of duty is available under notification of the Government of India in the Ministry of Finance (Department of Revenue) NO. 108/95-Central Excise, dated the 28 th August, 1995] shall be allowed if the final product is exempt from the whole of the duty excise leviable thereon or is chargeable to nil rate of duty”.

We further find that as per Notification No. 108/95-CE dt. 28.8.95 the goods were exempted which were supplied to the United Nations or an international organization for their official use. We further find that as there was an anomaly in the Rule to plug that anomaly Notification NO. 11/97-Ce dated 1.3.1997 came into effect…….In the case in hand before us, also the parts assemblies to the motor vehicle which is the final product supplied to unit. Therefore, the intermediate product of the parts assembled, the benefit of Notification No. 67/1995 read with Notification NO. 108/95 is available to the appellants. Accordingly, the impugned order is set aside and the appeal is allowed with consequential relief if any."

In passing : Through every rift of discovery some seemingly anomaly drops out of the darkness, and falls, as a golden link, into the great chain of order - Edwin Hubbel Chapin.

(See 2013-TIOL-1391-CESTAT-MUM)


POST YOUR COMMENTS