Mega Power Project exemption turns on project character, with independent certification supporting excise exemption for supplies.

Exemption under Notification No. 06/2006-C.E. applies only where the goods supplied correspond to goods that would receive customs exemption under the linked customs notification. The decisive factor is the character of the power project: the Ministry of Power certificate and later clarification described Chandrapur Units 8 and 9 as an independent project set up by MAHAGENCO, not an expansion of an existing Mega Power Project. The project was also recognised in a later customs notification listing Mega Power Projects, and prior proceedings on identical facts had taken the same view. On that basis, supplies for the project were treated as eligible for exemption and the demand was stated to be unsustainable.

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Issues: Whether the goods supplied for the Chandrapur project qualified for exemption under Notification No. 06/2006-C.E. dated 01.03.2006, and whether the project was to be treated as a new Mega Power Project set up by the purchaser or merely as an expansion of an existing unit.

Analysis: The exemption under Notification No. 06/2006-C.E. was available only where the imported equivalent goods would attract customs exemption under the corresponding customs notification. The decisive question was the character of the project. The Ministry of Power's certificate described the project as being set up by MAHAGENCO, and its later clarification expressly stated that Units 8 and 9 at Chandrapur were an independent power project and not an expansion project of a Mega Power Project. The project also found recognition in the later customs notification listing Mega Power Projects. The earlier order in the appellant's own case had reached the same conclusion on identical facts, and the subsequent adjudication for the same project had also dropped the demand.

Conclusion: The project was held to be an independent Mega Power Project set up by MAHAGENCO, and the appellant's clearances were held entitled to exemption under Notification No. 06/2006-C.E. The demand was unsustainable.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Where the competent authority certifies a project as being set up as an independent Mega Power Project, supplies for such project are eligible for the corresponding excise exemption and the demand based on treating the project as a mere expansion cannot be sustained.

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