TaxTMI 
TaxTMI 
2023 (8) TMI 894
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....t) (2x500MW). The bid was awarded to M/s. Bharat Heavy Electricals Ltd. (BHEL). Likewise, in March 2007 M/s. NTPC invited bids for supply and installation of Coal Handling Plant Package for Simhadri Super Thermal Power Project Stage II (2x500MW). This bid was awarded to M/s. Larsen and Toubro Ltd. (L&T). Further, M/s. Damodar Valley Corporation invited bids for supply, installation and commissioning of complete main project for Durgapur Steel Thermal Power Station (2x500MW). M/s. Bharat Heavy Electricals were successful bidders for the same. The Appellant herein were appointed as sub-contractor for the aforesaid projects BHEL required the Appellants to supply boiler components of main equipments of the Mega Power Project while L&T required the Appellant to supply Technological Structures and Chutes of Coal Handling Plant of the Mega Power Project. Upon being appointed as the sub-contractor for the aforesaid, the Appellants duly informed the jurisdictional Central Excise Authorities thereof for the supply of the aforesaid equipments. They also sought from the department a clarification whether Central Excise Duty was payable on the goods that were to be supplied by the Appellants. T....
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....l Power Project being set up by NTPC Limited in the State of Andhra Pradesh was an inter-state thermal power plant of a capacity of 1000 MW or more and that i) the power purchasing States have constituted the Regulatory Commission with full powers to fix tariffs; and ii) these States undertake, in principle, to privatize distribution in all cities in those States each of which has a population of more than one million within a period to be specified by the Ministry of Power. d) It was evident from the certificate issued by the Joint Secretary, Government of India, Ministry of Power that the Simhadri Stage II (1000MW) Thermal Power Project being set up by NTPC Limited fell under clause (b) of column (3) of Sl. No. 400 of Notification No. 21/2006-Cus dated May 26, 2006 and that condition no. 86 of the notification was duly fulfilled. e) NTPC Limited vide its letter (being Ref. No. CS-3530-155-2- PAC-AMDT-02) dated September 22, 2008 had declared the appellant to be a sub-contractor and had also specified the quantity, total value, description and specifications of the goods to be supplied by the appellant. f) Technological structures and chutes which will b....
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....on ibid and condition No. 86 stipulated thereto was duly met with. They assert that for determining eligibility, the Customs classification was relevant and it had no bearing with the classification under Central Excise Tariff Act, 1985. That the good supplied by them fall under Heading 98.01 of the Customs Tariff Act, and their classification under Sub-Heading 73089090 of the CETA was not relevant for determining the eligibility of the goods for availment of the exemption under Notification No. 21/2002-CUS dated March 1st, 2002. Further, the said goods match with the description provided under Serial No. 400 of the table thereto. They, further point out that CBEC vide F. No. 528/213/87-CUS (TU) ICD dated 08.08.87 had clarified that the basic idea underlying the creation of Tariff Item 98.01 pertaining to the project imports was simplification of assessment as all imports required for a project were subjected to a uniform rate of duty. Thus once the contractor is registered for initial setting up or substantial expansion of an existing plant the imports, supplied by the contractor were classifiable under chapter sub-heading 9801 of the Customs Tariff Act, 1975 and would be subjecte....
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....ng and (b) Customs Duty and Additional Duty of Customs leviable on the goods are exempted when imported into India. The Appellant is the sub-contractor for M/s. L&T and M/s. BHEL, who have been awarded bids for supply and installation of main plant package for Koderma Thermal Power Project (BHEL) and Coal Handling Plant Package for Shimhadri Super Thermal Power Project Stage II (L&T). The projects were duly certified by the Joint Secretary to the Government of India, Ministry of Power. The goods being component parts of the power projects merit classification under sub heading 9801 of the (Customs Tariff Act) and are rightly eligible for exemption as the said chapter concerns import of project imports of various categories and machinery items/raw material required for manufacture of goods. The manufacture and supply of the aforesaid items by the sub contractors and Appellant herein are not in dispute. Identical issue was considered by the Tribunal in the case of Cords Cable Industries Pvt. Ltd. Vs. Commissioner of C. EX., Jaipur 2016 (342) ELT 264 (Tri.-Del), where in the Tribunal held as under: "5. We find that in the same set of facts came up for decision bef....
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....ories to various Thermal Power Projects, it was categorically held that the only requirement for being eligible to exemption was the need of the goods to be cleared to Mega Power Projects against International Competitive Biddings. 10. To similar finding is the decision of the Tribunal rendered in the case of Paramount Communication Ltd. Vs. Commissioner of Central Excise, Jaipur 2016 (344) ELT 1091 (Tri.-Del.) where such exemption benefit was allowed to insulated wires and cables. The said decision of the Hon'ble Tribunal was upheld by the Hon'ble Rajasthan High Court 2018 (360) ELT a 324 Rajasthan High Court. Further, the Tribunal in the case of Paramount Communication Ltd. Vs. Commissioner of C. Ex. Jaipur 2016 (344) ELT 1091 (Tri.-Del.) as relied by the appellant, under similar circumstances, has observed that : "9. We find that goods in question are classifiable under Chapter 85 of the Tariff. Under Central Excise Tariff there is no Heading 98.01 which exists in Customs Tariff only. Since the goods manufactured in India cannot be classified under Heading 98.01 of the Central Excise Tariff, denial of the exemption on the ground of non-fulfilment of condition of Proj....
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....oms Tariff Act, 1975 (51 of 1975) and the additional duty leviable under Section 3 of the said Customs Tariff Act when imported into India." The exemption from Customs duty is provided at S. No. 400 of the table of Notification 21/2002-CUS dated 1-3-2002 which reads as under : S. No. Chapter or Heading No. or subheading Description of goods Standard rate Additional duty rate Condition No. (1) (2) (3) (4) (5) (6) 400 9801 Goods required for setting up of any Mega Power Project, that is to - (a) an inter-State thermal power plant of a capacity of 1000 MW or more; or (b) an inter-State hydel power plant of 500 MW or more, as certified by an officer not below the rank of a Joint Secretary to the Government of India in the Ministry of Power. Nil Nil 86 The exemption against S. No. 400 is subject to Condition 86 which reads as under : (a) If an officer not below the rank of a Joint Secretary to the Government of India in the Ministry of Power certifies that - (i) The power purchasing State has constituted the Regulatory Commission with full powers to fix tariffs; (ii) The power pu....