2012 (6) TMI 219 - AT - Central Excise

Deemed export - supply to mega power project - sub contractor - International Competitive Bidding (ICB) - applicants availed the benefit of Notification No.6/2006-CE dated 1.3.2006 and cleared the goods at nil rate of duty - Revenue wants to deny the benefit of Notification No.6/2006-CE on the ground that by invoking the provisions of Exim Policy Held that - Customs Notification 21/2002 does not provide any condition that the benefit is available subject to the provisions of the Exim Policy. Pre-deposit of duty, interest and penalty is waived for hearing of the appeal. The stay petition is allowed.

Summary

Issues:
- Application for waiver of pre-deposit of duty, interest, and penalty.
- Interpretation of Notification No.6/2006-CE and Notification No.21/2002-Cus.
- Denial of benefit by Revenue based on Exim Policy.
- Conditions for exemption from payment of customs duty for Mega Power Projects.

Analysis:
The case involved an application for the waiver of pre-deposit of duty, interest, and penalty amounting to Rs.7,11,541. The applicants, engaged in manufacturing air-conditioners and chilling units, cleared goods under international competitive bidding to a Thermal Power Station. The Revenue denied the benefit of Notification No.6/2006-CE, which allowed for nil rate of duty clearance. The contention was that goods supplied under international competitive bidding are exempt from duty, but the Revenue claimed the conditions were not met.

The applicant argued that goods for Mega Power Projects are exempt from customs duty under Notification No.21/2002-Cus. The Revenue, however, relied on the Exim Policy to deny the benefit, stating that the conditions of the Notification were not fulfilled. The Tribunal noted that the Revenue sought to deny the benefit by invoking the Exim Policy, but the conditions of Notification No.6/2006 were clear. The Customs Notification 21/2002 did not mention any condition related to the Exim Policy, leading to a prima facie case in favor of the applicant.

Ultimately, the Tribunal found merit in the applicant's contention and waived the pre-deposit of duty, interest, and penalty for the appeal hearing. The stay petition was allowed, emphasizing the absence of a condition linking the benefit of Notification No.21/2002-Cus. to the provisions of the Exim Policy.