MODERN INSULATORS Vs. CCE

JUDGEMENT

(1.) In this appeal, filed by M/s. Modern Insulators, the issue involved is whether the Central Excise duty and interest are demandable from them.

(2.) Shri B.L. Narsimhan, learned Advocate, submitted that the appellants manufacture electrical insulators; that they receive purchase orders for the projects being implemented by West Bengal State Electricity Board, being financed by Japan Bank for International Cooperation, for the supply of electrical insulators; that the respective buyers submitted the certificates, duly signed by the Head of Project Implementing Authority, Principal Secretary of the respective State Govt. and certified by the concerned Range Superintendent to the effect that the goods are exempt from payment of duty under Notification No. 108/95 -CE; that accordingly they had cleared the goods without payment of duty under Notification No. 108/95 -CE; that subsequently, the Commissioner has confirmed the demand of duty for the period from March, 2001 to December, 2001 and demanded interest on the ground that the benefit of Notification No. 108/95 was not available since the Japan Bank for International Cooperation is not an international organisation approved by the Govt. of India. He, further, submitted that they had cleared the goods without payment of duty only after obtaining the necessary certificates from the project authority and the permission of the jurisdictional Deputy Commissioner to clear the goods; that the permission granted by the Deputy Commissioner has attained finality, which has not been challenged under Section 35E of the Central Excise Act; that further, Rule of fairness as well as the principle of promissory estoppel requires that the appellants cannot be punished for the incorrect certificates/permission issued by the other higher authority of the Govt. itself; that they have been permitted in writing to clear all the goods without payment of duty and the Department cannot take the plea that the duty is payable by them.

(3.) Learned Advocate also submitted that the interest cannot be demanded from the appellants under Section 11AB of the Central Excise Act for the duty payable before the date on which the Finance Bill 2001 received the assent of the President i.e. 11.5.2001.