Tribunal grants exemption for FRP products in Water treatment plant project under Notification No.6/2006

The Tribunal allowed the appeal, setting aside the order denying exemption to the appellant for supplying 'fibre reinforced plastic products (FRP)' for a Water treatment plant project under Notification No.6/2006. The Tribunal held that the denial based on classification under Heading 9801 was legally unsustainable, citing relevant precedents. The appellant met all conditions for exemption under the notification, and the classification issue under Customs Notification No.21/2002 was not a valid reason to deny the exemption.

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Issues:
Appeal against Order-in-Appeal No.94/2011 dated 30.3.2011 regarding exemption under Notification No.6/2006 dated 01.03.2006 for 'fibre reinforced plastic products (FRP)' supplied under International Competitive Bidding (ICB) for a Water treatment plant project.

Analysis:
The appellant, engaged in manufacturing FRP products, claimed exemption under Notification No.6/2006 dated 01.03.2006 for goods supplied under a Water treatment plant project via a main contractor. The department denied the exemption, leading to the appeal. The Tribunal referred to past cases like Sarita Steels and Industries Ltd. v. CCE and Om Metals SPML JV Unit 2 v. CCE & ST, emphasizing that goods required for mega projects are exempt under customs notifications. The Tribunal noted that the denial of exemption based on classification under Heading 9801 (related to project import) is not legally sustainable under Central Excise Tariff. Consequently, the impugned order was set aside, and the appeal was allowed.

Conclusion:
The Tribunal, following precedents, found the denial of exemption to the appellant unjustified as all conditions for exemption under Notification No.6/2006-C.E. were met, except for the classification issue under Customs Notification No.21/2002-Cus. Since Heading 9801 does not exist in the Central Excise Tariff and pertains to project import, the denial of exemption on this basis was deemed legally unsustainable. As a result, the impugned order was set aside, and the appellant's appeal was allowed.

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