Per S.S. Kang:

The Respondents vide letter dt. 4.8.99 made a request to decide the matter on merits.

2. The Revenue filed this Appeal against order in appeal dated 30.8.93 passed by the Collector (Appeals). In the impugned order the benefit of Notification No. 70/77 dt. 7.5.77 was granted to Ice Cub maker cabinet manufactured by the Respondents and supplied to M/s. Voltas Ltd.

3. Ld. D.R. submits that the benefit of exemption Notification No. 70/77-CE is available only in respect of excisable goods (other than cigarettes) supplied as stores for consumption on board a vessel of the Indian Navy. He submits in the present case the goods manufactured by the Respondents are supplied to M/s. Voltas Ltd. Therefore, the goods, in question, could not be treated as ship stores for Navy vessel at the time of removal. He submits that in the present case the goods were cleared by the Respondents M/s. Voltas under a contract to M/s. Voltas Ltd. thereafter M/s. Voltas Ltd. supplied the Goods to M/s. Garden Reach Ship Builder Engineering Pvt. Ltd. who is the ship building industry.

4. We heard the Ld. D.R. and perused the records. In this case, the Respondents are manufacturing Ice Cube Making Cabinets which were supplied to M/s. Voltas. The Respondents claimed the benefit of Notification No. 70/73 dt. 7.5.73 and the Notification is reproduced below:-

"Indian Navy ship stores: Basic & Addl. duty exempt 70/77-CE dt. 7.5.77, as amended by 347/86-CE dt. 18.6.1986: In exercise of the powers conferred by sub rule (I) of Rule 8 of the Central Excise Rules, 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 hereby exempts excisable goods other than cigarettes) supplied as stores for consumption on board vessel of the Indian Navy from the whole of the duty of excise leviable thereon under the Central Excise and Salt Act 1944 (1 of 1944) and the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957)."

The Notification exempts goods from payment of excise duty which are supplied as stores for consumption on board vessel of any (sic) Indian Navy. As per definition of stores under Section 2 of the Customs Act 1962, [stores]means goods for use in vessel or aircraft, and include fuel and spare parts and other articles of the equipments whether or not for immediate fittings. In the present case, the Respondents have not supplied the goods for Indian Navy for (sic) [or?] subject to use as stores for consumption on board of a vessel. It is admitted fact that the goods in question is supplied to Voltas Ltd. and not to Indian Navy as the goods have not been supplied by the Respondents to the Indian Navy to be used as stores for the consumption on board of a vessel we find force in the contention of the Revenue. Therefore, the Respondents are not entitled to the benefit of Notification No. 70/77-CE in respect of Ice Cub (sic) [cube] Making Cabinets which were supplied to M/s. Voltas. In view of the above discussion the impugned order is set aside and the appeal is allowed.