Central excise exemption for TMT bars supplied to a mega power project upheld despite project-import classification objections.

TMT bars supplied for a specified mega power project against international competitive bidding were treated as eligible for central excise exemption under Notification No. 6/2006-CE. The Revenue's objection that project-import classification under Customs Notification No. 21/2002-Cus and the absence of Heading 9801 in the Central Excise Tariff defeated the claim was rejected, because Heading 9801 is a customs tariff entry and cannot control exemption for goods manufactured in India. Following earlier Tribunal decisions, the conditions for exemption were found satisfied, and the excise duty demand, interest, and penalty were not sustainable.

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Issues: Whether TMT bars supplied for a mega power project were eligible for exemption from central excise duty under Notification No. 6/2006-CE dated 01.03.2006, notwithstanding the Revenue's objection based on project-import classification under Customs Notification No. 21/2002-Cus and the absence of Heading 9801 in the Central Excise Tariff.

Analysis: The supplies were made to a specified mega power project against international competitive bidding, and that factual position was not disputed. The exemption under Notification No. 6/2006-CE was treated as dependent on the goods being supplied for the specified project under international competitive bidding and on the corresponding customs-side exemption condition. The denial of benefit was found unsustainable because Heading 9801 pertains to the Customs Tariff and is not available in the Central Excise Tariff, so classification objections based on project-import entries could not defeat the excise exemption for goods manufactured in India. The Tribunal followed its earlier decisions on the same issue and held that the conditions for exemption were satisfied.

Conclusion: The exemption was allowed and the demand of central excise duty, interest, and penalty could not be sustained.

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