A division bench of Rajasthan High Court in the case of Commissioner of Central Goods and Service Tax Central Excise vs. Bhoorathanam Construction Co. (P) Ltd. held that mere technical mistake on the part of the assessee cannot be a ground for denying the exemption.
The assessee-respondent had taken up a project for supplying water pipes for a particular project. They had availed exemption of central excise duty via exemption Notification in respect of supplies of pipes to the Public Health Engineering Department (PHED) Government of Rajasthan.
As per the Notification exemption can be availed only upon fulfilling certain conditions. The Revenue decided that the assessee-respondent had failed to satisfy the conditions. The Commissioner of Income Tax (Appeals) (CITA(A) also affirmed the findings of the lower authority.
As per one condition, a certificate is issued by the Collector/District Magistrate/Deputy Commissioner of the District in which the plant is located is produced to the Dy./Assistant Commissioner of Central Excise, having jurisdiction over the factory of the effect that such goods are cleared for the intended use as specified in the Notification. This certificate should contain the names of the goods that are cleared, only then exemption could be availed. However, the adjudicating authority had observed that the appellants have cleared MS Specials without payment of duty and no certificate to the effect that such goods were cleared for the intended use as specified in the Notification have been submitted. He noted that the certificates submitted by the assessee didn’t have the MS Specials cleared by the assessee along with other pipes viz. PSCC Pipes, MS Pipes & BWSC Pipes in the guise of exemption Notifications to PHED, Govt. of Rajasthan did not find mention of supplies of MS Specials in relevant certificates whereas the other Pipes have their clear mention in the certificates. The CIT(A) found that the product MS Specials had not been cleared by the Notification as it didn’t contain the name and the assessee had thereby availed the exemption of Central Excise duty wrongly by willful misstatement of the facts with an intention to evade the payment of Central Excise duty in the guise of exemption Notification in respect of the supplies of MS Specials made to the PHED, Govt. of Rajasthan. He also found that the Pipes are cleared in running length whereas the MS Specials were cleared in Nos. and Kgs which clearly indicated that both the products are different and their uses are also different and known in the market with different names and characteristics.
On appeal to the Tribunal, the bench observed that that out of the 8 certificates in 4 certificates MS Special had been mentioned and that the department had already granted the exemption.
It is the view of the Tribunal that when the exemption had been granted in 4 certificates it could be granted in the remaining 4 certificates also. The bench also noted that MS Special was supplied to the same projects in hand. The tribunal allowed the appeal of the assessee-respondent.
The High Court Bench comprising of Justice Vijay Kumar Vyas and Justice K.S. Jhaveri confirmed the decision of the Tribunal and observed “In our considered opinion, the production is the same, manufacturing and the process is the same and excise duty is liable on the manufacturing, merely because in the certificate there is no mention of MS Special, the taxing statute will not be different. In view thereof, the view taken by the Tribunal is just and proper and no interference is required.”
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