Per Jyoti Balasundaram : The appellants are engaged in the manufacture of Bar Loader, Loader, Backhoe Loader falling under Chapter Heading 84.29 of the 1st Schedule to the CETA 1985. During the period March 2002 to December 2002 they cleared 25 Nos. of the above mentioned excisable goods by availing exemption in terms of Notification No. 108/95-CE dated 28.8.95 which inter alia exempts excisable goods supplied to projects financed by United Nations and International Organizations approved by the Government of India, subject to certain conditions relating to production of certificate from specified authorities. Before the clearance of each of the vehicles, they specifically informed the Assistant Commissioner of Central Excise having jurisdiction over their factory, of the proposal to clear the goods in terms of the Notification. Certificate issued by Project authorities as well as clearance issued by the Government of India was also enclosed. The show cause notices, one dated 27.3.2003 covering the period March 2002 to December 2002 raising duty demand of Rs. 84,21,600/- and the other dated 29.1.2004 covering the month of January 2003 raising a demand of Rs. 6,52,800/- (total duty demand is Rs. 89,74,400/-) together with interest and proposing imposition of penalties were issued on the ground that the benefit of exemption under the Notification was not available to the appellants as it only exempts goods supplied to Projects financed by United Nations or International Organizations approved by the Government of India while the appellants had cleared the loaders to contractors of the respective Projects and not to the Project Implementing Authorities and on the ground that the contractors continue to be the owners of the goods and continue to possess them even after the completion of the Project. The notices were adjudicated by the Commissioner of Central Excise who confirmed the demands together with interest under Section 11AB of the Central Excise Act and imposed the penalty of Rs. 25 lakhs on the appellants under Rule 25 of the Central Excise Rules. Hence this appeal.

2. We have heard both sides. The relevant extract of the notification is reproduced below:-

"Exemption to goods supplied to UN or an specified International Organisation. - In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all goods falling under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the said goods) when supplied to the United Nations or an international organisation for their official use or supplied to the projects financed by the said United Nations or an international organisation and approved by the Government of India, from the whole of -

(i) the duty of excise leviable thereon under Section 3 of the Central Excise Act, 1944 (1 of 1944); and

(ii) the additional duty of excise leviable thereon under sub-section (1) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957):

Provided that before clearance of the said goods, the manufacturer produces before the Assistant Commissioner of Central Excise having jurisdiction over his factory, -