2017 (11) TMI 1328 - AT - Central Excise

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

M/s. Bhilai Engineering Corp. Ltd. Versus C.C.E. Raipur

The Tribunal allowed the appeal, granting the benefit of Notification No. 12/2012-CE for supplies to Mega Power Projects and against International ... Benefit of N/N. 12/2012-CE dated 17-03-2012 - It was alleged that the items which were supplied for the Mega Power Projects were not covered within the description given in Sl. No. 338 of the said notification - Held that: - the goods supplied for the two Mega Power Projects can be considered as components which are used for manufacture of other goods used for the power project - Under similar circumstances, the Tribunal in the case of GANGES INTERNATIONAL [2014 (8) TMI 498 - CESTAT NEW DELHI] has extended the benefit of notification 6/2006 as well as 12/2012. N/N. 12/2012-CE dated 17-03-2012 - international competitive Bidding - adjudicating authority has denied the benefit by taking the view that the Custom Duty exemption under the above notification will not be available to the appellant for the reason that the same is applicable only to goods covered under Project Imports under CTH 9801. Since there is no corresponding entry in the Excise Tariff, he denied the Central Excise exemption under Sl. No. 336 of notification 12/2012 - Held that: - the same set of facts came before the Tribunal and was decided in favour of the assessee in many cases - In the case of CORDS CABLE INDUSTRIES PVT. LTD Vs COMMISSIONER OF C.EX., JAIPUR [2016 (9) TMI 1126 - CESTAT NEW DELHI], it was held that the denial of exemption on the ground of classification shown under Customs Notification is 9801 is not sustainable - the denial of the benefit of notification for good supplied against International Competitive Bidding is not justifiable. Appeal allowed - decided in favor of appellant. 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.