2016 (10) TMI 1209 - AT - Central Excise

Benefit of N/N. 6/2002-CE - supply of plastic power cables and stainless steel wire to Thermal Power project - denial on the ground that the goods cleared by them do not fall under Customs Tariff Heading 9801 - Held that - The Tribunal in Paramount Communication Ltd. 2016 (7) TMI 863 - CESTAT NEW DELHI held that exemption cannot be denied as the goods manufactured by the appellant cannot be classified under Customs Tariff Heading 9801. Apparently, the condition of Project Import required cannot be literally imposed on Indian manufacturer for exemption under N/N. 6/2002-CE. Benefit of notification cannot be denied - appeal allowed - decided in favor of appellant.

Summary

Issues:
Claim for exemption under Notification No.6/2002-CE dated 1.3.2002 for goods supplied to Thermal Power Project against International Competitive Bidding.

Analysis:
The appeal pertains to the denial of exemption under Notification No.6/2002-CE dated 1.3.2002 by the Commissioner of Central Excise, Jaipur I to the appellants engaged in manufacturing plastic power cables and stainless steel wire liable to central excise duty. The dispute revolves around the condition that if goods are exempted from customs duty when imported into India, the same exemption should apply to indigenous goods. The Customs Notification No.21/2002-Cus dated 1.3.2002 exempts goods under Heading 9801 required for setting up Mega Power Projects. The appellant's claim was rejected on the basis that the goods cleared by them did not fall under Customs Tariff Heading 9801, which deals with project imports, while the appellants are Indian manufacturers under the Central Excise Tariff.

The Tribunal, after hearing both sides and reviewing the appeal records, noted that a similar issue involving the same appellant was previously decided by the Tribunal in Paramount Communication Ltd. The Tribunal held in the aforementioned case that exemption cannot be denied merely because the goods manufactured by the appellant do not fit under Customs Tariff Heading 9801. It was observed that imposing the condition of Project Import on an Indian manufacturer for exemption under Notification No.6/2002-CE would be unreasonable. This stance was supported by precedents such as Jindal Steels & Industries Ltd. vs. C.C.E., Jaipur 2015 (329) ELT 595 (Tri-Delhi) and Kent Introl vs. C.C.E., Nasik 2014 (301) ELT 84 (Tri-Mum.).

Based on the analysis of the previous decisions and the specific circumstances of the case, the Tribunal found no merit in the impugned order of the Commissioner of Central Excise, Jaipur I. Consequently, the Tribunal set aside the order and allowed the appeal in favor of the appellant. The judgment was pronounced in open court on 04.10.2016 by Mr. Justice (Dr.) Satish Chandra, President, and Mr. B. Ravichandran, Technical Member of the Appellate Tribunal CESTAT NEW DELHI.