Appeal granted for supply to Mega Power Projects under Notification No. 12/2012-CE. Exemption justified.

The Tribunal allowed the appeal, granting the benefit of Notification No. 12/2012-CE for supplies to Mega Power Projects and against International Competitive Bidding. It held that the goods supplied were components used for manufacturing other goods for the power project, and the denial of exemption based on classification grounds was not justified. The appeal was allowed on 09.11.2017.

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Issues Involved:
1. Eligibility for benefit under Notification No. 12/2012-CE dated 17-03-2012 for goods supplied to Mega Power Projects.
2. Eligibility for benefit under Notification No. 12/2012-CE for goods supplied against International Competitive Bidding.

Issue-wise Detailed Analysis:

1. Eligibility for Benefit under Notification No. 12/2012-CE for Goods Supplied to Mega Power Projects:

The appellant supplied various fabricated items of steel and machinery parts at NIL rate of duty under Notification No. 12/2012-CE to Mega Power Projects. The lower authority denied the benefit of the notification for projects at Sl. No. 1 and 2, alleging that the supplied items were not covered under the description in Serial No. 338 of the notification. The adjudicating authority argued that there was no evidence to substantiate that the goods were used to make machinery, parts, or components of any machinery, and items like Boiler supporting structure and Buckstay Structure could not be considered as components of machinery.

Upon review, it was noted that the goods were indeed cleared for use in Mega Power Projects and the required certificates were produced. The Tribunal referenced a similar case, GANGES INTERNATIONAL PVT. LTD. vs COMMISSIONER OF E.EX., RAIPUR, where it was held that items like General Fabrication Structures and Auto Welded Beams, even if used as supporting structures, should be treated as component parts of machinery. The Tribunal concluded that the goods supplied for the Mega Power Projects could be considered components used for manufacturing other goods for the power project. Thus, the demand for duty and penalty for these supplies was set aside.

2. Eligibility for Benefit under Notification No. 12/2012-CE for Goods Supplied against International Competitive Bidding:

For the project at Serial No. 3, the appellant claimed exemption under Serial No. 336 of Notification No. 12/2012-CE, which is linked to International Competitive Bidding. The adjudicating authority denied the benefit, arguing that the exemption under the notification was applicable only to goods covered under Project Imports under CTH 9801, which does not have a corresponding entry in the Excise Tariff.

The Tribunal referenced multiple cases, such as CORDS CABLE INDUSTRIES PVT. LTD. vs COMMISSIONER OF C.EX., JAIPUR, where it was held that when goods are supplied to Mega Power Projects and all conditions are fulfilled, the exemption should be granted despite the classification issue. The Tribunal noted that the classification Heading 9801 is not available in the Central Excise Tariff and relates to project imports under Customs Tariff. Therefore, the denial of exemption on this ground was deemed legally unsustainable. Consequently, the benefit of the notification for goods supplied against International Competitive Bidding was allowed.

Conclusion:

The Tribunal set aside the impugned order and allowed the appeal, granting the benefit of Notification No. 12/2012-CE for both the supplies to Mega Power Projects and the supplies against International Competitive Bidding. The judgment emphasized that the conditions for exemption were met and the denial of benefits based on classification grounds was not justified. The appeal was allowed, and the order was pronounced in the open court on 09.11.2017.

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