By TIOL News Service

MUMBAI, AUG 04, 2017: AGAINST the order passed by the Commissioner(A) denying them the benefit of notification 64/95-CE (Sr. no. 7) in respect of steel bars and rods supplied to Vikram Sarabhai Space Centre (VSSC) , the appellant is before the CESTAT.

It is submitted that the exemption was claimed on the basis of certificate issued by the VSSC informing that such clearances are duty free.

The operative portion of the order of Commissioner(A) reads -

"15. In view of the above discussions and findings appeal is disposed of by way of remand to the lower authority in terms of following orders:

(i) The appellants are not entitled to the benefit of Notification No. 64/95-CE dated 1.3.1995.

(ii) Extended time period will apply for recovery of the duty.

(iii) The lower authority will decide the issue of adjustment of cenvat credit reversed against the duty liability.

(iv) After such adjustment, if any permissible the lower authority will decide the issue of interest under Section 11AB and penalty under Section 11AC."

The appellant added that the steel bars and rods supplied are components of the assembly system and sub-system of the launch vehicle; that having filed the return duly disclosing the material facts to the department, extended period of limitation could not have been invoked; that there being no proposal in SCN for imposition of penalty, the Commissioner(A) could not have ordered so; that in their own case, the Assistant Commissioner had allowed the exemption. Furthermore, after claiming the exemption, they had reversed CENVAT credit as mandated under the CCR, 2004.

The AR justified the order and emphasized that based on the certificate given by VSSC, exemption from duty cannot be claimed.

The Bench observed -

++ We do not find any merit in the submission of the appellant that the proceedings is time barred. Mere filing of the returns does not exempt the appellant from consequence of law .

++ Grant of benefit of a notification is made at public cost. Grant of benefit is an exception. Therefore entry of exemption is strictly construed. A claimant does not get liberal consideration without satisfying primary condition of grant. Without strict compliance to the legislative mandate, appellant has liberally claimed exemption. Therefore, finding of the appellate authority on the time bar is confirmed.

++ Appellant may not be denied of the benefit of the CENVAT credit, if permissible by law.

The order of the Commissioner (Appeals) was upheld and the appeal was disposed of.

(See 2017-TIOL-2768-CESTAT-MUM)