2016 (12) TMI 28 - AT - Central Excise

Appellate Tribunal Upholds Exemption for Goods to Mega Power Projects

CCE & ST, Raipur Versus M/s. M.P. Tar Products

CCE & ST, Raipur Versus M/s. M.P. Tar Products - 2017 (347) E.L.T. 297 (Tri. - Del.) Issues:Eligibility for exemption under Notification No.6/06-CE dated 1.3.2006 for goods supplied to Mega Power Projects.Analysis:The appeal before the Appellate Tribunal CESTAT New Delhi concerned the eligibility of the respondent for exemption under Notification No.6/06-CE dated 1.3.2006 for goods supplied to Mega Power Projects. The issue revolved around whether the goods supplied to Mega Power Projects in response to International Competitive Bidding were eligible for exemption under the said notification. The exemption was subject to the condition that the goods were exempted from customs duty when imported into India. The respondent supplied dutiable goods classified under CETH 68071090, while the imported goods were covered by Notification No.21/2002-Cus dated 1.3.2002 - Sl.No.400. The Commissioner (Appeals) initially initiated proceedings to deny the exemption, arguing that the classification under the notification did not cover the goods supplied by the respondent.The Commissioner (Appeals) analyzed the situation and concluded that the goods supplied by the respondent, namely Coal Tar Primer and Coal Tar Tape falling under CETH 68071090, were exempted from central excise duty as they were procured indigenously under a Project Authority Certificate. The Commissioner further clarified that the goods used for setting up the Mega Power Project were classifiable under heading 98.01 of the Customs Tariff and were exempted from duty. Additionally, the Commissioner addressed the allegation that the appellant had not proven they were awarded the contract to supply the goods, citing evidence from an amendment to the Project Authority Certificate as proof of the contract award.Moreover, the Commissioner highlighted that the Mega Power Project in question was a single power plant with a total capacity of 2640MV, comprising four turbines of 660MV each. This clarification was crucial in determining the eligibility for the exemption under the relevant notifications. The Commissioner's decision was based on a thorough examination of the facts and relevant notifications, ultimately concluding that the benefit provided to the Mega Power Project under the notifications could not be denied based on the capacity and classification of the project.Upon hearing both sides and reviewing the appeal records, the Appellate Tribunal found that the reasons and findings in the Commissioner's order were sound and in line with previous decisions on similar matters. The Tribunal referred to several past decisions where exemptions were allowed to assesses in comparable situations, further supporting the decision to uphold the exemption for the respondent in this case. Consequently, the appeal by the Revenue was rejected, affirming the eligibility of the respondent for the exemption under Notification No.6/06-CE dated 1.3.2006 for goods supplied to Mega Power Projects.