Relief to Taneja Aerospace: CESTAT Quashes Excise Duty Demand on clearance of Armour Panels and Stretcher Assembly on ground of Limitation [Read Order]

The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) granted relief to Taneja Aerospace by quashing the excise duty demand on clearance of armour panels and stretcher assembly on the ground of limitation. 

Taneja Aerospace and Aviation Limited, the appellant assessee had cleared the goods viz., Armour Panels and Stretcher Assembly which are parts of helicopters without payment of duty to Hindustan Aeronautics Ltd. [HAL] based on the exemption certificates issued in terms of Notification No. 63/1995-Central Excise. 

The assessee appealed against the order passed by the Commissioner of Central Excise for confirming the demand of Excise 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. 

S. Durairaj, the counsel for the assessee contended that in the case of Government of Kerala Vs. Mother Superior Adoration Convent, the court held that the rule of purposive construction was required to advance the object of exemption Notification and even in the instant case the goods were supplied to HAL to be further used in their manufacture for ultimate supply to the Ministry of Defence for official use. 

M Ambe, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee had manufactured the goods independently and had not complied with the job work procedure, the benefit of Notification was sought to be denied. 

The Bench observed that the the Show Cause Notice was issued demanding duty for the period from 2008-2012 invoking an extended period under proviso to Section 11A(1) / 11A(4) of the Central Excise Act and the assessee had cleared the impugned goods based on the exemption certificates given by the officials of HAL and all the details were furnished in the invoices. 

There was no suppression with an intent to evade duty attributable to the assessee, the demand of duty invoking an extended period was not legal and so not sustainable. 

The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) quashed the excise duty demand while allowing the appeal filed by the assessee. 

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