21 August 2009
A Dept. of Shipping Corporation is empowered by the CG to issue exemption certificate to the manufactures from whom they collect the required materials to be used in making ships for Indian Navy. But in case of some materials they are not directly purchased from the manufacturers but from the dealers who are purchasing that materials directly from the manufacturers. Now the Dept. till last year issued the Exemption Certificate in the name of the Manufacturers in respect of those materials not directly purchased from them. This year some persons in that Dept.of Shipping Corporation raise the issue that this is not proper. They contended that the Exemption Certificate can be issued only to those manufacturers from whom the materials are directly purchased. Again as the Delaers are not liable to be levied Excise Duty Exempiton Certificate can not be issued to them. But some other persons in that Dept.of Shipping Corporation argued that the main purpose of issuing the Exemption Certificate is to make the materials cheaper since they are being used by the Govt. and since the materials are purchased from the immediate dealers ( who are directly purchasing materials from the manufacturers) hence there is no problem in issuing Exemption Certificate in the name of the manufacturer.
Please suggest the correct view or any other alternative view in the light of provisions of the Act or any case decisions. Thanks in advance.
CAclubindia
