The Customs, Excise And Service Tax Appellate Tribunal Chennai ruled in favor of Taneja Aerospace and Aviation Limited, granting duty exemption benefit for helicopter production.
Facts
M/s. Taneja Aerospace and Aviation Limited (the appellant herein) has challenged the Order-in-Original No. 4/2014 (CE) dated 25.03.2014 issued by the Commissioner of Central Excise, Chennai confirming a demand of duty of Rs.80,24,009/- under Section 11A(4) of the Central Excise Act, 1944 along with interest and also for imposing penalty under Section 11AC (a) of the Central Excise Act, 1944.
Submissions
Advocate S. Durairaj representing the appellant has submitted that the order of the Tribunal Delhi in the case of National Engineering Industries Ltd. was reversed by the Hon’ble Rajasthan High Court wherein the Hon’ble High Court has interpreted the Circular dated 23.06.2006 in favor of the assessee and held that the assessee is eligible for the benefit of the exemption.
Authorised Representative M. Ambe representing the Department submitted that the Board’s Circular referred to by the Rajasthan High Court is not applicable in the instant case as one of the units mentioned in the list of the Notification instead of supplying goods directly to the Ministry of Defence made their supplies to another unit mentioned in the said list.
Decision
The division bench of Vasa Seshagiri Rao Member (Technical) And Sulekha Beevi C.S. Member (Judicial) noted that the appellants have cleared Armour Panels and Stretcher Assembly which are parts of helicopter to M/s. Hindustan Aeronautics Ltd., based on the duty exemption certificates provided by M/s. HAL availing exemption benefit.
The tribunal further noted that, M/s. HAL, Bangalore, one of the specified units is to manufacture Advanced Light Helicopter (ALH) and supply to the Ministry of Defence for their official use. As various components or parts are required to be procured from other manufacturers / vendors, the DGM (Deputy General Manager) in charge of Helicopter Division had issued the above excise duty exemption certificate to the appellant wherein it was certified that the items being procured are required for the production of ALH and so are exempted from payment of excise duty leviable thereon under the impugned Notification.
“It has to be observed that the Notification is silent regarding legality or otherwise and the basis for issuance of this kind of excise duty exemption certificates by M/s. HAL as there is no specific mention about the authority, who has to issue this duty exemption certificate”, the bench said.
The tribunal found the interpretation purposeful and constructive that the words “if manufactured by the following units’ are to be construed to include the manufacture of goods by the vendors or job worker or contractors and if supplied to the specified unit for utilization for ALH Project.
After appreciating the facts, as well as taking note of the Circular dated 23.06.2006 and following the decisions, the bench held the issue on merits in favour of assessee.
Case title: M/s. Taneja Aerospace and Aviation Limited v/s Commissioner of GST and Central Excise
Citation: Excise Appeal No. 41553 of 2014
