Project-import exemption for power project cables sustained despite technical objection to the certificate and classification challenge.

Electric wires and cables supplied for a specified mega power project were treated as eligible for exemption under Notification No. 6/2006-C.E. because they were supported by a certificate from the authorised project authority, and a technical objection to the issuing authority could not defeat substantive entitlement. The goods were also held classifiable under Heading 98.01 as items covered by the project-import framework for machinery, components and raw materials required for initial setting up of the project. On that basis, the exemption was sustained and the Tribunal's relief to the assessee was upheld.

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Issues: (i) Whether electric wires and cables supplied for a mega power project were entitled to exemption under Notification No. 6/2006-C.E. despite objection as to the certificate issued by the project authority; (ii) Whether electric wires and cables were classifiable under Heading 98.01 of the Customs Tariff Act, 1975 so as to qualify for the exemption.

Issue (i): Whether electric wires and cables supplied for a mega power project were entitled to exemption under Notification No. 6/2006-C.E. despite objection as to the certificate issued by the project authority?

Analysis: The goods were supplied for setting up a specified power project and were supported by a project authority certificate. The certificate was issued by the authorised officer of the project authority, and the assessee could not be penalised for any internal lapse on the part of the departmental or project-side functionary. The exemption provision had to be applied in a manner that furthered the object of the project and did not frustrate it on a technical objection.

Conclusion: The exemption was available and the objection regarding the issuing authority of the certificate was rejected.

Issue (ii): Whether electric wires and cables were classifiable under Heading 98.01 of the Customs Tariff Act, 1975 so as to qualify for the exemption?

Analysis: Heading 98.01 covers items of machinery, components and raw materials required for initial setting up of specified projects. Electric wires and cables used for the project fell within that project-import framework, and the Tribunal's view on classification was found to be correct.

Conclusion: Electric wires and cables were held classifiable under Heading 98.01 and entitled to the exemption.

Final Conclusion: The appeal failed and the Tribunal's order granting exemption relief to the assessee was sustained.

Ratio Decidendi: Goods supplied for an approved project are to receive the exemption and project-import classification when they are covered by the project framework and certified by the authorised project authority, and a technical objection to the certification cannot defeat substantive entitlement.

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