Exemption for goods supplied to mega power projects accepted where CIB conditions and certification requirements were satisfied.

Goods manufactured in India and classifiable under Chapter 73 were held eligible for exemption under Notification No. 6/2006-CE when supplied against International Competitive Bidding for a mega power project. The exemption applied because condition 19 linked it to the corresponding customs exemption under Notification No. 21/2002-Cus, and the record showed compliance with the relevant power-project certificate requirement. The objection that project import formalities were not met was not accepted, because Chapter 98.01 was not applicable to the excisable goods in question. On that basis, the excise exemption remained available and the associated demand, interest, and penalty could not survive.

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Issues: Whether gate and gate parts classifiable under Chapter 73, when supplied to a mega power project against International Competitive Bidding, were entitled to exemption under Notification No. 6/2006-CE dated 01.03.2006 despite the Revenue's objection based on project import requirements.

Analysis: The exemption under Notification No. 6/2006-CE applies to all goods supplied against International Competitive Bidding, subject to condition 19. Condition 19 links the exemption to customs duty exemption under Notification No. 21/2002-Cus dated 01.03.2002. The relevant customs exemption for goods required for setting up a mega power project is at Serial No. 400, and the record showed that condition 86 stood satisfied through the certificates issued by the Joint Secretary, Ministry of Power. The denial was based on the view that Serial No. 400 relates to Chapter 98.01 and that project import regulation requirements were not fulfilled. However, the goods were manufactured in India and classifiable under Chapter 73 of the Central Excise Tariff, where Chapter 98.01 does not exist. The failure to satisfy project import formalities was therefore not a valid ground to deny the excise exemption once the notification conditions were otherwise met.

Conclusion: The assessee was entitled to exemption under Notification No. 6/2006-CE dated 01.03.2006, and the demand, interest, and penalty could not survive.

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