VULCAN GEARS Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) APPELLANTS cleared 78 gear boxes (Winch Assembly) availing exemption of Central Excise duty under Notification No. 63/95 -C.E., dated 16 -3 -1995. The lower authorities have taken a view that the appellant is not eligible for the exemption under said notification since the notification exempts the goods when they are supplied directly to the Ministry of Defence by the companies named therein and in the notification, the appellant's name was not included in the names of the companies. Consequently, duty amount of Rs. 17,70,007/ - has been demanded and a penalty of Rs. 4.5 lakhs has been imposed under Rule 25 of Central Excise Rules, 2002. Learned Consultant appearing on behalf of the appellant submitted that the issue is no longer res integra and has been decided in favour of the appellant in the case of Sujan Industries v. CCE, Mumbai as reported in, 2007 (220) E.L.T. 161 (Tri. -Mumbai). Learned SDR, on the other hand, submits that the said decision was rendered without taking note of the decision of Hon'ble Supreme Court in the case of Leader Engineering Works v. CCE, Chandigarh as reported in, 2007 (212) E.L.T. 168 (S.C). In this decision, the Apex Court held that if the notification prescribed that the supply has to be made directly to the Indian Navy and if the supply is made through ship builders or the supply is made to ship builder, the exemption would not be available even if certificate as required under notification from Navy is produced. He submits that the notification specified BEML as one of the companies for supply to Ministry of Defence availing exemption whereas the appellant had supplied to BEML.

(2.) WE have considered the submissions made by both sides. In this case, the Tribunal while deciding in favour of the appellant, took note of the circular issued by the Board in respect of Notification No. 184/86, which is precedent notification to Notification No. 63/95. In Circular vide F. No. 213/18/91 -C.Ex. 6, Circular No. 5/92, dated 19 -5 -1992 and another letter from Ministry of Finance F. No. IV/16/4/2003, dated 7 -11 -2003, it has been clarified that the exemption will be extended to all job workers and venders supplying inputs required by BEML for manufacture of finished goods supplied to Ministry of Defence. Tribunal had relied upon the decision of Hon'ble Supreme Court in the case of Dhiren Chemicals as reported in : 2002 (139) E.L.T. 3 (S.C.), and had taken a view that the circular issued by the Board is binding on the department. The learned SDR submitted that this has been overruled by Hon'ble Supreme Court in the case of M/s. Ratan Melting & Wire Industries case : 2008 (231) E.L.T. 22 (S.C.). We find that since in M/s. Ratan Melting Industries case, the Apex Court only observed that the departmental officers are not precluded from filing an appeal if the circular issued by the Board is contrary to the law. In this case, it is seen that the department is not in appeal. Further, the decision of Hon'ble Supreme Court in the case of header Engineering Works, 2007 (212) E.L.T. 168 (S.C.) was in the case of exemption Notification No. 64/95, which is a totally different notification.