2014 (3) TMI 750 - AT - Central Excise

Supply of good under ICB for mega power project - Sub-contractor - Project authority certificate - Denial of benefit of Notification No. 06/2006-CE dated 01/03/2006 - Penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002 - Held that - In the annexure to the certificate, the appellant s name figures as a sub-contractor for supply of EOT Cranes. Therefore, the condition that the goods should be supplied against International Competitive Bidding procedure is clearly satisfied. Vide Notification No. 12/2012-Cus, goods falling under CTH 9801 is exempt if the same is supplied for any Mega Power Project of capacity of 1000 MW or more subject to a certification by the Joint Secretary to the Government of India in the Ministry of Power. The said certificate is available on record and it is clearly stated that BARH Super Thermal Power Project has a capacity of 1000 MW or more and satisfies all other requirements for grant of exemption. Therefore, we are satisfied that the appellant has complied with the terms and conditions of the exemption notification - Decided in favour of assessee.

Summary

Issues:
- Duty demand upheld by lower appellate authority
- Denial of benefit of Notification No. 06/2006-CE
- Penalty imposed under Section 11AC of the Central Excise Act, 1944
- Eligibility of appellant for exemption from Central Excise duty
- Interpretation of conditions for exemption under Notification No. 6/2006-CE and Notification No. 12/2012-Cus
- Comparison with a similar case involving Kent Introl Pvt. Ltd.

Analysis:
1. The appeal and stay petition challenged the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Nashik, upholding a duty demand of Rs.9,55,304/- along with interest and imposing a penalty on the appellant. The appellant, M/s. Unique Industrial Handlers Pvt. Ltd., Nashik, was denied the benefit of Notification No. 06/2006-CE dated 01/03/2006. The appellant contended that they supplied Electrically Operated Travelling (EOT) cranes to NTPC, BARH Super Thermal Power Project as a sub-contractor under International Competitive Bidding (ICB) procedure, making them eligible for duty exemption. The appellant argued that they met the conditions for exemption under Notification No. 12/2012-Cus as the project satisfied the capacity requirement for exemption from import duties.

2. The Lower appellate authority and the Additional Commissioner (AR) representing the revenue confirmed the duty demand and denial of exemption. However, both parties acknowledged that the issue was similar to a case involving Kent Introl Pvt. Ltd., where this Tribunal had ruled in favor of the appellant. The Tribunal, after considering the submissions, decided to dispose of the appeal without pre-deposit of dues. The Tribunal found that the appellant fulfilled the conditions for exemption under Notification No. 6/2006-CE and Notification No. 12/2012-Cus. The project's certificate confirmed the appellant's role as a sub-contractor in an International Competitive Bidding procedure, meeting the necessary criteria for duty exemption.

3. The Tribunal emphasized that the appellant's situation mirrored the case of Kent Introl Pvt. Ltd., where a similar issue had been resolved in favor of the appellant. The Tribunal concluded that the appellant rightfully qualified for the benefit of Notification No. 06/2006-CE, and consequently allowed the appeal. The appellant was granted consequential relief as per the law, and the stay petition was also disposed of. The judgment highlighted the importance of fulfilling the specific conditions laid out in the exemption notifications to avail the benefits under the Central Excise Act and Customs Rules.