2015 (10) TMI 1916 - AT - Central Excise

Clearance of goods meant for mega power plant - - Held that - Duty exemption is provided by Notification No. 6/2006-C.E., dated 1-3-2006 from duties of Customs and the additional duty leviable under the First Schedule of the Customs Tariff Act, 1975 and Section 3 of the Customs Act, 1962, respectively, in respect of goods imported into India which are required for setting up any Mega Power Project i.e. an interstate thermal power plant of a capacity of 1000 MW or more or an interstate hydel power plant of a capacity of 500 MW, subject inter alia to condition No. 86 of the Notification; namely if an officer not below the rank of Joint Secretary to the Govt. of India in the Ministry of Power issues the necessary certificate - The assessee cleared the goods meant for power plants whose combined production capacity was in excess of 1000 MW but comprised of units producing power of different capacities, of 250 to 500 MWs, as the case may be. The adjudication orders concluded that a single unit manufacturing 1000 MW would alone be entitled to the exemption benefits. - Decided in favour of assessee.

Summary

Issues: Interpretation of duty exemption notification for power projects.

Analysis:
The case involved multiple appeals by the assessee and the Revenue against Orders-in-Appeal passed by the Commissioner. The central issue revolved around the interpretation of duty exemption provided by Notification No. 6/2006-C.E. for goods imported into India for setting up Mega Power Projects. The notification required a certificate from a Joint Secretary to the Govt. of India in the Ministry of Power. The assessee had cleared goods for power plants with a combined capacity exceeding 1000 MW but comprising units of varying capacities. The adjudication orders initially concluded that only a single unit manufacturing 1000 MW would be entitled to exemption benefits.

However, subsequent clarifications from the Ministry of Power, through an Office Memorandum and a Board proceeding, affirmed that mega power projects with a total capacity of at least 1000 MW across multiple units were eligible for the exemption benefits under the notification. This clarification led the ld. AR for Revenue to concede that the issue was now settled in favor of the assessee.

Consequently, during the hearing, both the ld. Counsel for the assessee and the ld. AR for Revenue agreed that the issue was in favor of the assessee. As a result, the appeals filed by the assessee were allowed, and the Revenue's appeal was dismissed. The Tribunal disposed of all the appeals by a common order, emphasizing that the assessee was entitled to the duty exemption benefits for the goods cleared for power projects with a combined capacity exceeding 1000 MW across multiple units. No costs were awarded in this decision.