Sub-contractor supplies for an internationally bid power project can qualify for exemption when the notification conditions are met.

Goods supplied by a sub-contractor for a mega power project were treated as eligible for exemption under Notification No. 6/2006-CE where the main project contract was awarded through international competitive bidding and the allied customs-condition was satisfied. The Tribunal's earlier view was followed that the benefit is not confined to the main bidder alone, so supplies made through the subcontracting chain can qualify if they are required for the project. On those facts, the exemption applied and the duty, interest, and penalty demand was not sustainable.

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Issues: Whether the appellant was entitled to exemption under Notification No. 6/2006-CE dated 01.03.2006 for clearances made as supplies for a mega power project through a sub-contractor, and whether the duty demand was sustainable.

Analysis: The goods were supplied for NTPC power project work through ABB Limited and its sub-contractor arrangement. The exemption under Notification No. 6/2006-CE applies to goods supplied against international competitive bidding, subject to the customs-duty condition under Notification No. 21/2002-Cus. The Tribunal followed its earlier view that the benefit is not confined to the main bidder alone and that supplies by a sub-contractor qualify where the main contract was awarded through international competitive bidding and the goods were required for the project. On the facts, the conditions for the exemption were found to be satisfied.

Conclusion: The appellant was held eligible for the exemption, and the demand of duty, interest, and penalty was unsustainable.

Ratio Decidendi: Goods supplied by a sub-contractor for execution of a project awarded through international competitive bidding are eligible for exemption where the notification covers goods supplied against such bidding and the allied customs-condition is satisfied.

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