2012 (12) TMI 383 - AT - Central Excise

Tribunal Waives Pre-Deposit, Stays Recovery: Compliance Emphasized for Mega Power Project

RAMSARUP UTPADAK, UNIT-II Versus COMMR. OF C. EX., KOLKATTA-III

The Tribunal granted the waiver of pre-deposit and stayed the recovery for the applicant, emphasizing compliance with exemption conditions and the ... Benefit of Notification 6/2006 - applicant supplied the TMT bars to Thermal Power Project, an inter-state thermal power plant which qualifies as mega power project at nil rate of duty by availing the benefit of Notification 6/2006 – alleged that the goods are classifiable under chapter 72 and not under Chapter Heading 9801 for which the benefit of Notification No. 21/2002 is available – Held that:- Goods imported for mega power project plant to be erected by BHEL is eligible for exemption from payment of duty - Appellants supplied the goods to bidders of International Competitive Bidding, the condition of the Notification is satisfied and there is no justification for denying the exemption notification to the appellant - waiver of pre-deposit allowed Issues:Waiver of pre-deposit under Section 11AC of Central Excise Act, 1944 based on the supply of TMT Bars to a mega power project at nil rate of duty under specific notifications.Analysis:The applicant filed for waiver of pre-deposit of Rs. 1,46,63,302 along with an equal penalty under Section 11AC of the Central Excise Act, 1944. The applicant supplied TMT Bars to an inter-state Thermal Power Plant qualifying as a Mega Power Project at nil duty rate, supported by a Project Authority's Certificate. The issue arose when a Show Cause Notice was issued, contending that the goods did not meet the conditions for exemption under Notification No. 6/2006-C.E. The Commissioner confirmed the demand and penalty. The applicant argued that the project certification and the necessity of TMT Bars for the project justified exemption under relevant notifications. The Tribunal noted previous cases where similar benefits were allowed, emphasizing the applicant's compliance with the exemption conditions, leading to a prima facie case in their favor for a waiver of pre-deposit.The applicant's contention focused on the certification by the Mega Power Project and the necessity of TMT Bars for the project's erection and commissioning. They argued that the goods fell under the provisions of Notification No. 21/2002-Cus. and that the requirement of an Advance License was not applicable in their case. Additionally, they highlighted timely communication to the authorities regarding the project supply and cited relevant legal precedents supporting their position. The Tribunal acknowledged the necessity of TMT Bars for the project and the certification provided, leading to a favorable view on the applicant's compliance with exemption conditions.The department's argument emphasized strict interpretation of the notification conditions and cited legal cases supporting their stance. They stressed the importance of a clear balance of convenience in granting interim orders. However, the Tribunal found in favor of the applicant, noting the successful supply of TMT Bars to the Mega Power Project and the compliance with exemption conditions. The Tribunal referenced a previous case where denial of benefits was overturned due to similar grounds, ultimately leading to a waiver of pre-deposit and a stay on recovery during the appeal process.In conclusion, the Tribunal granted the waiver of pre-deposit and stayed the recovery, considering the applicant's compliance with exemption conditions and the necessity of the supplied goods for the Mega Power Project. The decision was based on the establishment of a prima facie case in favor of the applicant, aligning with previous judgments supporting similar claims.