Captive power plant exclusion from project import exemption where the facility was for self-consumption, not public power generation.

A captive power plant established for a sister concern's exclusive self-consumption was held not to qualify as a power generation project under Heading 98.01 for project import benefit and exemption under Notification No. 21/2002-Cus. The material distinction was that a power project is meant for generation and distribution of electricity to the public, whereas a captive plant serves internal use; on that basis, the plant's limited capacity and captive purpose took it outside the notification. The claim to project import benefit therefore failed, and exemption was denied.

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Issues: Whether a 1MW captive power plant used for the appellant's own sister concern could be treated as a power generation project eligible for project import benefit and exemption under Notification No. 21/2002-Cus.

Analysis: The relevant entry under Heading 98.01 covered power generation projects, including gas turbine power projects, but the plant in question had a capacity of only 1MW and was intended exclusively for captive use by the sister concern, not for generation and distribution of electricity to the public. The distinction between a power project and a captive power plant was material: a power project is set up for public generation and distribution of electricity, whereas a captive plant is established for internal consumption. On that basis, the plant did not answer the description of a power generation project under the notification.

Conclusion: The claim to project import benefit failed, and the denial of exemption was upheld.

Ratio Decidendi: A captive power plant set up for self-consumption does not constitute a power generation project for the purpose of project import exemption under Heading 98.01.

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