2013 (12) TMI 220 - AT - Central Excise

Denial of the benefit of Notification No. 6/2006 Classification of goods - Fabricated items supplied to mega power projects to be classified under Chapter heading 73.08 of CETA,1985 OR under CSH 98.01 of CTA,1975 Waiver of pre-deposit Held that - Following RAMSARUP UTPADAK, UNIT-II Versus COMMR. OF C. EX., KOLKATTA-III 2012 (12) TMI 383 - CESTAT, KOLKATA - Prima facie, TMT bars cleared to various mega power projects, even if falls under Chapter Heading 72 of Central Excise Tariff Act,1985 would be eligible to the benefit of Notification No. 6/2006 - the applicant could able to make out a prima facie case in their favour for waiver of pre-deposit of dues - Pre-deposits waived till the disposal Stay granted.

Summary

Issues:
Waiver of pre-deposit of duty and penalty under Section 11AC of CEA, 1944 for fabricated items supplied to mega power projects.

Analysis:
The appellant sought waiver of pre-deposit of duty amounting to Rs.1.45 crores and an equal penalty imposed under Section 11AC of CEA, 1944. The appellant, engaged in manufacturing fabricated items under Chapter 73.08 of CETA, 1985 supplied to mega power projects, claimed exemption under Notification No. 6/2006-CE. The dispute arose as the fabricated items were classified under Chapter Sub-Heading 73.08 of CETA, 1985 instead of Chapter Sub-Heading 98.01, affecting eligibility for the exemption. The appellant argued that the items were used as components in the power projects, citing a CBEC circular and a Tribunal order in a similar case for TMT bars. The Revenue supported the Commissioner's findings.

Upon review, the Tribunal acknowledged that the fabricated items were supplied to and used in mega power projects. The crux of the dispute was the classification under Chapter headings 73.08 and 98.01 of CETA, 1985, impacting eligibility for the exemption. Referring to a previous case involving TMT bars, the Tribunal found that even if falling under Chapter Heading 72, the items could still be eligible for the exemption under Notification No. 6/2006-CE. Consequently, the Tribunal held that the appellant had established a prima facie case for waiver of pre-deposit of dues. As a result, the pre-deposit of dues was waived, and recovery stayed pending the appeal.

In conclusion, the Tribunal granted the appellant's application for waiver of pre-deposit of duty and penalty under Section 11AC of CEA, 1944, based on the prima facie case presented regarding the classification of the fabricated items supplied to mega power projects.