2016 (6) TMI 663 - AT - Central Excise

Duty exemption under Notification No.6/2006-CE dt. 1.3.2006 - bidder to international competitive bid - whether the goods supplied by the appellant to Tata Projects Ltd., the international competitive bidder for use in the Mega Power Project executed by Coastal Gujarat Power Ltd. (CGPL) shall grant duty exemption to such goods under Notification No.6/2006-CE dt. 1.3.2006 or the exemption shall be granted to the person using the goods in the project? - Held that - The notification in terms of Sl.No.91 read with condition No.19 therein grants excise duty/customs duty exemption to the goods meant for use in the mega power project. It does not grant exemption to any person. This simple interpretation of law attributable to the mandate of the notifications answers the question as above. There is no necessity to go into further detail in the absence of any contrary finding by Revenue that the appellant was not the supplier of the goods meant for use in international competitive bidding project i.e. mega power project. Hon ble High Court of Madras in the case of CCE Pondicherry Vs Caterpillar India Pvt. Ltd. 2013 (7) TMI 244 - MADRAS HIGH COURT held that The use of the phrase supplied to the projects financed by the said United Nations or an International Organisation and approved by the Government of India clearly shows that the condition for grant of exemption is supply of the goods towards the project and nothing beyond. - Decided in favour of assessee

Summary

Issues:
Interpretation of Notification No.6/2006-CE regarding duty exemption for goods supplied to a Mega Power Project executed by a specific company.

Analysis:
The central issue in the present case revolves around the eligibility of duty exemption for goods supplied to a Mega Power Project executed by a specific company. The primary question raised is whether the appellant, who supplied goods to an international competitive bidder for the project, is entitled to duty exemption under Notification No.6/2006-CE, or if the exemption should be granted to the entity using the goods in the project. The department argues that since the appellant only provided support to the bidder and was not a bidder itself, it should not qualify for the exemption.

Upon analyzing the terms of Notification No.6/2006-CE, it is evident that the exemption is granted to goods meant for use in the mega power project, not to any specific person or entity. The notification, particularly Sl.No.91 along with condition No.19, clearly outlines the conditions for excise duty/customs duty exemption for goods intended for use in the project. The interpretation of the law based on the notification's mandate indicates that the focus is on the goods supplied for the project, rather than the status of the supplier. The absence of any contrary finding by the Revenue regarding the appellant's role as the supplier further supports this straightforward interpretation.

Furthermore, the decision is reinforced by a judgment of the Hon'ble High Court of Madras in a related case, where the court emphasized that the condition for granting exemption is the supply of goods towards the project, without any additional requirements. The court's ruling provides additional clarity and precedent in favor of interpreting the exemption provision based on the direct supply of goods to the project.

In light of the above rationale and legal interpretations, all six appeals before the Appellate Tribunal are allowed. The judgment emphasizes the importance of adhering to the specific conditions outlined in the notification for granting duty exemption and underscores the significance of the direct supply of goods to the designated project for eligibility.