News Update

Aadhaar & GST glitches should trigger IT Infrastructure Protection ReviewData Protection Framework - Panel to hold public consultation on TuesdayCrypto row gains new ‘currency’; CBDT finds it cryptic; Notices issued to investorsGovt appoints Anandiben Patel as MP GovernorExport of onions allowed on LC with M. E. P of USD 700 FOB per MT with immediate effect till 20.02.2018Silvassa tops List of winner Smart CitiesMinister launches Cyber Surakshit Bharat to strengthen CybersecurityIndia welcomes IMF-WB Report on improving banking supervision by RBI100 accessible websites of various State Govts launchedJaitley launches National CSR Data Portal & Corporate Data PortalGovt appoints Amardeep Singh Bhatia as Director of Serious Fraud Office till March, 2020Turmoil in AAP - Election Commission favours disqualification of 20 MLAs for holding office of profitMauritius continues to be key source of FDI in India; followed by USA & UK: RBII-T - Discretionary waiver of interest charged u/s 234A to 234C by Settlement Commission, will not negate corresponding right for refund of interest to assessee: SCIntl Customs Day: 20 persons, including 17 officers, to get WCO Certificate of MeritGST - Coffee beans processing units in trouble; seek exemptionGST Council also approves several amendments in CGST RulesGST Council grants mega relief to healthcare services & clarifies rates for many ServicesI-T - Finance cost incurred on overdraft obtained from bank, which is advanced to sister concern for no business purpose, is not allowable business loss: ITATSteering clear of Anti - Profiteering chargesIssues affecting Credit Card Industry – Budget 2018 should provide solutionsGovt amends Passport Rules to substitute certain documents to be attached under Tatkal & non-Tatkal schemes17 lakh Composition taxpayers paid only about Rs 307 Crore; Council expresses disappointmentLegislative changes - Council receives demand to introduce Sec 9(4) only for Composition taxpayers
 
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