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of <h1>High Court rules in favor of petitioner on duty exemption for Turnkey Projects, allowing appeal without pre-deposit.</h1> The High Court set aside the order requiring deposit of duty and interest in a case involving the interpretation of duty exemption for Turnkey Projects. ... Stay/Dispensation of pre-deposit - Undue hardship Issues involved: Interpretation of duty exemption for Turnkey Projects, classification of components under Section 37B Order, tax liability on erection of fire heater.Interpretation of duty exemption for Turnkey Projects: The Commissioner determined that the Special Cut Naphtha Project undertaken by L & T qualified as a Turnkey Project exempt from duty under Board's Section 37B Order. However, components used in the project were deemed dutiable as manufactured goods under Para 5(i) of the said order.Classification of components under Section 37B Order: The Commissioner further held that the erection of the fire heater within the project constituted manufacture, attracting tax liability.Tax liability on erection of fire heater: The petitioner contended that since the Turnkey Project was exempt from duty, the fire heater, being an integral part of the project, should not be subject to tax. The Court found that the petitioner had established a strong prima facie case, leading to the setting aside of the order requiring deposit of duty and interest.Conclusion: The High Court set aside the impugned order, allowing the respondent to proceed with the appeal without pre-deposit of duty and interest. The Rule was made absolute with no order as to costs.
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