International Competitive Bidding exemption upheld for domestic supply where customs exemption conditions were satisfied for imported goods.

Goods supplied by a domestic manufacturer for a mega power project under International Competitive Bidding were held eligible for exemption under Notification No. 6/2006-C.E. The Project Authority Certificate established that the supply satisfied the principal excise-notification condition, and the customs exemption requirement was treated as met because the goods were exempt when imported. Applying the principle in Kent Introl Pvt. Ltd., import-specific conditions in the customs notification were held not to defeat exemption for a domestic supplier under the excise notification. The denial of the exemption was therefore unsustainable.

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Issues: (i) Whether goods supplied by a domestic manufacturer were entitled to exemption under Notification No. 6/2006-C.E. when the supply was made against International Competitive Bidding and the condition linked to customs exemption was satisfied.

Analysis: The Project Authority Certificate showed that the goods were meant for supply to a mega power project pursuant to International Competitive Bidding, satisfying the principal condition of the excise notification. The condition regarding customs exemption was examined in the light of the alternate customs notification and the prior decision in Kent Introl Pvt. Ltd., which held that domestic suppliers need only establish that the goods are exempt when imported and that import-specific conditions do not govern a domestic supply. Applying that view, the existence of customs exemption under the relevant notifications was sufficient to satisfy the excise notification condition.

Conclusion: The goods were eligible for exemption under Notification No. 6/2006-C.E., and the denial of the benefit was unsustainable.

Final Conclusion: The impugned order was set aside and the appeal was allowed, granting the exemption benefit to the assessee.

Ratio Decidendi: Where a domestic supply is made under International Competitive Bidding and the goods are exempt from customs duties when imported, import-specific conditions in the customs notification do not defeat the exemption available to the domestic supplier under the excise notification.

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