Tribunal grants benefit under Notification 6/2006-C.E. for mega power project supply

The Tribunal held that the appellant was eligible for the benefit of Notification No. 6/2006-C.E. The denial of the benefit by the adjudicating authority was overturned, and the appeals were allowed with consequential relief. The Tribunal clarified that the exemption under the notification applies to goods supplied for a certified mega power project through international competitive bidding, even if the supplier did not directly participate in the bidding.

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Issues Involved:
1. Eligibility for the benefit of Notification No. 6/2006-C.E.
2. Participation in international competitive bidding.
3. Applicability of Customs Notification No. 21/2002-Cus.
4. Classification of goods under Chapter 72 vs. Chapter 98.01 of the Customs Tariff Act.
5. Registration under Project Import Regulations, 1986.

Issue-wise Detailed Analysis:

1. Eligibility for the benefit of Notification No. 6/2006-C.E.:
The primary issue was whether the appellant (SSIL) was eligible for the exemption under Notification No. 6/2006-C.E. for supplying goods to a mega power project. The notification exempts goods supplied against international competitive bidding from duties of customs and additional customs duty. The adjudicating authority denied the benefit, claiming SSIL did not participate in international competitive bidding and the goods supplied did not fall under the relevant customs notification.

2. Participation in international competitive bidding:
The appellant argued that although they did not directly participate in international competitive bidding, they supplied goods to BHEL, which had won the contract through such bidding. The Tribunal observed that the exemption applies to goods supplied against international competitive bidding, regardless of whether the supplier directly participated in the bidding. The Tribunal cited the CST Ltd. case, where it was held that sub-contractors supplying goods to a main contractor who won the bid are also eligible for the exemption.

3. Applicability of Customs Notification No. 21/2002-Cus.:
The condition attached to Notification No. 6/2006-C.E. requires goods to be exempted under the Customs Tariff Act when imported into India. Entry No. 400 of Notification No. 21/2002-Cus. exempts goods required for setting up a mega power project, certified by a Joint Secretary in the Ministry of Power. The Tribunal found that the mega power project executed by BHEL met this condition, as it had the necessary certification and involved sub-contracting to M/s. Jindal Power Ltd., which procured goods from SSIL.

4. Classification of goods under Chapter 72 vs. Chapter 98.01 of the Customs Tariff Act:
The Revenue argued that the goods supplied (angles, beams, channels) fell under Chapter 72 of the Central Excise Tariff Act and could not be considered under Chapter 98.01, which pertains to machinery and components. The Tribunal noted that Notification No. 21/2002-Cus. categorically exempts goods required for the execution of a mega power project, without restricting the classification to Chapter 98.01. Thus, the goods supplied by SSIL were eligible for the exemption.

5. Registration under Project Import Regulations, 1986:
The Revenue contended that neither SSIL nor BHEL was registered under the Project Import Regulations, 1986, which should disqualify them from the exemption. The Tribunal did not find this argument persuasive, as the primary condition for the exemption was the certification by the Ministry of Power, which was duly obtained.

Conclusion:
The Tribunal concluded that SSIL was eligible for the benefit of Notification No. 6/2006-C.E. The adjudicating authority's order was set aside, and the appeals were allowed with consequential relief. The Tribunal emphasized that the exemption applies to goods supplied against international competitive bidding, even if the supplier did not directly participate in the bidding, as long as the goods were required for a certified mega power project.

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