CX - Exemption to goods supplied to Universities, National Labs - Matter remanded to consider evidence whether goods were used for research purposes: SC
By TIOL News Service
NEW DELHI, APRIL 24, 2015: THE respondents in these appeals have been supplying power transformers to certain institutes which are IITs, Universities, National Laboratories, etc. The question is as to whether these equipments supplied by the respondents are covered by Notification No.10/97 CE dated 1.3.1997. The said Notification exempts the supply of equipments to certain types of institutions from payment of Central Excise in case the conditions mentioned in the Notification are fulfilled.
The Notification contains a table which has a column specifying the names of the institutions to which such goods are to be supplied. These institutions are mentioned in column No.3. Likewise, the description of goods is stated in Column No.4 which mentions the conditions to be satisfied deals about required certificates etc. that are to be produced from the authorities concerned as well as aggregate value of the prototypes received by the institutions. The equipments so supplied may be to research institutions or universities, etc. for research purposes as well as non - commercial research purposes.
It is not in dispute that the respondents have supplied the goods to those very institutions which are mentioned in column 2. The conditions specified in column No.4 have also been fulfilled by the respondents. However, the entire dispute is about the description of goods.
The requirement is that the goods should be meant for the use of research by scientific and technical institutions.
The Order-in-Original passed by the Assessing Authority, refusing to give the benefit of the aforesaid Notification to the respondents, took the view that the conditions mentioned in column 3 are not fulfilled in the instant case. The relevant portion of the said order reads as under:
"It is perhaps relevant to mention here that exemption in the said notification is not solely based on certificate here that exemption in the said notification is not solely based on certificate of the institutions. Had this been so, there was no need of column (3) i.e. description of goods, in the notification. From a plain reading of the Notification, it cold be seen that only those goods which are specified in column (3) of the table are exempted. If goods which are not covered in the description as specified in column (3) of the table to the Notification, then they are not exempted. Just a certificate from a Department does not entitle the assessee to clear the goods without payment of duty as the goods have to meet the description of goods specified in column (3) of the table to the Notification."
It is the this reason given by the adjudicating authority which is the subject matter of the dispute.
The Counsel appearing for the respondents, intends to rely upon some material, which she submits has been downloaded from the web sites of the IITs, Universities, etc. to whom the goods were supplied, in order to demonstrate that the goods supplied were meant for research. Since this material was not produced before the commissioner, he did not have any occasion to verify the same or to consider the effect thereof.
The Supreme Court set aside the order passed by the Tribunal and referred the matter to the adjudicating authority to consider the issue afresh after giving opportunity to the respondents to place the material before him. The respondents shall also be accorded personal hearing, if they so desired. Another issue relating to manufacture which arises, is not gone into on merit and it will be open to the Department to raise that issue also before the appropriate forum.
(See 2015-TIOL-83-SC-CX )
