2007 (6) TMI 412 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 6/2002 regarding exemption benefit for a power plant with a capacity of 350 MW.
2. Consideration of a power plant's capacity exceeding 350 MW for exemption eligibility.
3. Granting of stay application and waiver of pre-deposit in a duty amount dispute.

Analysis:

1. The judgment revolves around the interpretation of Notification No. 6/2002 concerning the exemption benefit for a power plant with a specified capacity of 350 MW. The appellant, a PSU Unit, sought the benefit of this notification for a 359 MW Combined Cycle Gas Turbine Power Plant. The dispute arose due to the slight excess in the plant's capacity. However, the appellant argued that the notification was specific to this plant and the marginal increase should not be a reason for denial.

2. The Tribunal analyzed the notification's language and found that it was tailored specifically to the appellant's plant for supply, without imposing a strict cap of 350 MW. The counsel for the appellant highlighted that the increase in capacity was due to technological advancements, resulting in a higher output while maintaining a net supply of 350 MW. The Tribunal acknowledged this argument, emphasizing that the primary consideration was the net supply and not the exact capacity figure. Consequently, the Tribunal granted the stay application, waiving the pre-deposit requirement, and stayed the recovery process.

3. Given the substantial duty amount involved in the dispute (Rs. 157 crores), both parties requested an expedited final hearing. The Tribunal accepted this request, scheduling the matter for final hearing on 27th August 2007. This decision reflects the Tribunal's recognition of the complexity and financial significance of the case, warranting a prompt resolution to address the substantial duty amount at stake.

This comprehensive analysis of the judgment showcases the Tribunal's meticulous examination of the notification's provisions, the specific circumstances of the appellant's power plant, and the implications of the capacity variation on exemption eligibility. The Tribunal's decision to grant the stay application and expedite the final hearing demonstrates a balanced approach to resolving the duty amount dispute efficiently and fairly.