Per T.K. Jayaraman : Both revenue and the assessee have filed appeals against Order-in-Original No. 17/2007 dt. 30.3.2007 passed by the Commissioner of Central Excise and Service Tax, Large Tax Payers' Unit, Bangalore.

2. Shri K.S. Ravi Shankar, learned advocate appeared on behalf of the assessee and Ms. Joy Kumari Chander, learned JCDR for the revenue.

3. We heard both sides. The assessee's are the manufactures of motor vehicles and also the bodies and chassis. They cleared 298 motor vehicles to the Government of Gujarat and other relief agencies in the context of relief and rehabilitation of earthquake victims in the State of Gujarat availing exemption under Notification No. 2/2001 dt. 27.1.2001. Further, they had also reversed 8% of the value of these motor vehicles in the cenvat credit account in terms of Rule 57AD of the Central Excise Rules. Revenue proceeded against the appellants on the ground that during the relevant period, the intermediary products which have been manufactured by the assessee namely the chassis and the engines are not entitled for any exemption Notification. Since the intermediary products are not entitled for the exemption, they are liable to pay duty. That is the stand taken by the revenue. In fact, Notification No. 67/95 dated 16.3.1995 exempts intermediary products which are used in the manufacture of exempted final products. When the final products are dutiable, then there is no exemption in respect of the intermediary products during the relevant period. In view of this, proceedings were initiated against the assessee and the learned Adjudicating Authority confirmed the demand after making certain adjustments for the reversal of the cenvat credit. Anyhow that is not very important now for our decision. The stand of the revenue is that Notification No. 67/95 dt. 16.3.95 is the only Notification which gives exemption for the intermediary products and when the final products are not dutiable, the intermediary products are not exempted. In view of this, they had demanded duty inspite of the Notification No. 2/2001 dated 27.1.2001 giving exemption for all excisable goods cleared for earthquake relief to the State of Gujarat. This point has been insisted on by the revenue in the Show Cause Notice and the adjudication order confirms only that. It is also stated that later Notification No. 67/95 itself had been amended with effect from 1.6.2001 to provide for exemption of intermediary products when they are used in the manufacture of final products provided in terms of Rule 57AD the appellant reverses cenvat credit to the extent of 8% of the sale value of the final product. The stand of the revenue is during the relevant period that Notification was not available and the said Notification No. 31/2001 dated 1.6.2001 is not having any retrospective effect. Taking this view, the Original Authority confirmed the demands. After confirming the demand, he had given a setoff of 8% reversed by the assessee.

4. The assessee is highly aggrieved over the impugned order. They had raised several contentions. They had also relied on several case laws. The main contention raised is that the Notification No. 2/2001 exempts all excisable goods donated for relief and rehabilitation of earthquake victims. It is clear that each and every component assembly, accessories are all exempted and it would not be correct in the context of this Notification to demand duty on the intermediary products. Several case laws have been cited to urge that the Notification should not be interpreted in such a manner as to defeat its very purpose. We would like to mention the case laws relied on by the learned advocate.