2015 (2) TMI 830 - AT - Central Excise

Mega Power projects - Exemption under Notification No.6/2006-CE dated 01/03/06 - benefit of exemption denied in adjudication on the ground that parts manufactured by the appellant are general fabrication structures, which are not specified in the notification in question, either as parts or components of any machinery. - Held that - parts of boiler, being manufactured by the appellants, were Audo Weld, Beams, Bunker, Columns and Boxes, etc, which the Commissioner has held to be the General Structures, not specified in the notification and an identical question was considered by the Tribunal in the case of Ganges International Pvt. Ltd. Vs. CCE, Raipur 2014 (8) TMI 498 - CESTAT NEW DELHI - notifications in question are identical to the items being manufactured by M/s. Ganges International Pvt. Ltd. and the notification is also the same. In fact, the reasonings for denial of benefit of the notification in question , by the adjudicating authority, is also identical to the objections raised by the Revenue in the case of Ganges International (supra). As such, following the above decision of the Tribunal, laying down that even if the general fabrication structures are being used as supporting structures for some machineries, the same are required to be treated as components parts of that machinery and the benefit in Sl.No.338 of the notification no.12/2012-CE would be available inasmuch as the same covers all the components whether finished or not. By following the said decision, we set aside the impugned order - Decided in favour of assessee.

Summary

Issues:

1. Interpretation of exemption notification for boiler parts supplied to Mega Power Project.
2. Classification of manufactured parts as general fabrication structures.
3. Denial of exemption leading to imposition of duty, interest, and penalty.

Issue 1: Interpretation of exemption notification for boiler parts supplied to Mega Power Project

The case involved the appellant manufacturing boiler parts for a Mega Power Project claiming exemption under notification no.12/2012-CE. The appellant provided the required certificate from authorities as per notification conditions. The Revenue objected, stating the parts were general fabrication structures not specified in the notification, resulting in duty confirmation, interest, and penalty imposition. The Tribunal analyzed a similar case and held that even if the structures were used as supporting structures for machinery, they should be treated as component parts, making them eligible for exemption under the notification.

Issue 2: Classification of manufactured parts as general fabrication structures

The Revenue argued that the boiler parts manufactured by the appellant were general fabrication structures, not covered under the notification, leading to the denial of exemption. The Commissioner identified the parts as General Structures, including Audo Weld, Beams, Bunker, Columns, and Boxes. However, following the precedent set by a previous Tribunal decision, the Tribunal ruled that even if the structures served as supporting structures for machinery, they should be considered component parts eligible for exemption.

Issue 3: Denial of exemption leading to imposition of duty, interest, and penalty

Due to the Revenue's objection regarding the classification of the manufactured parts, the appellant faced duty confirmation amounting to &8377; 1,40,79,364, along with interest and penalty. However, the Tribunal, based on the earlier decision, overturned the impugned order, allowing the appeal and granting consequential relief to the appellant. The Tribunal clarified that the benefit of the exemption notification should apply to all components, whether finished or not, as long as they are part of the machinery.

In conclusion, the Tribunal's judgment focused on interpreting the exemption notification, classifying the manufactured parts, and addressing the denial of exemption resulting in duty, interest, and penalty imposition. By aligning with the precedent, the Tribunal ruled in favor of the appellant, emphasizing the inclusion of all component parts under the exemption notification, irrespective of their specific use within machinery.