2016 (7) TMI 863 - AT - Central Excise

Claim of exemption from duty - supply of instrumental cables to Mega Thermal Power plant - otification No. 6/2006 CE dated 1.3.2006. - Held that - We find that goods in question are classifiable under Chapter 85 of the Tariff. Under Central Excise Tariff there is no Heading 98.01 which exists in Customs Tariff only. Since the goods manufactured in India can not be classified under 98.01 of the Central Excise Tariff denial of the exemption on the ground of non-fulfillment of condition of Project Import Regulation is not sustainable particularly when condition No. 86 of the Notification No. 21/2002 dated 1-3-2002 is fulfilled by them. Appellants are eligible for exemption under Notification 6/2006 dated 1-3-2006 - Decided in favor of assessee.

Summary

Issues:
- Whether goods Wire and cables classifiable under Chapter 85 of the Central Excise Tariff cleared to Mega Power Project against International Competitive Bidding are entitled to exemption from duty under Notification 6/2006, dated 1-3-2006.

Analysis:
1. The appellant, engaged in manufacturing insulated wire and cables, supplied instrumental cables to Mega Thermal Power plants under an exemption notification. The original adjudicating authority disallowed the claimed benefit, leading to the appeal.

2. The appellants claimed exemption under Notification No. 6/2006 against goods supplied through International Competitive Bidding. The dispute arose regarding the applicability of conditions specified in the notification and related customs regulations.

3. The Department issued a Show Cause Notice demanding duty, interest, and penalty, which was confirmed by the Commissioner. The appellants challenged this order based on the interpretation of the exemption notification conditions.

4. Despite producing the required certificate, the Commissioner denied the exemption, citing non-compliance with customs regulations applicable to goods classified under a specific heading. The appellants argued against importing customs regulations into the Central Excise Notification.

5. The issue revolved around whether the Wire and cables supplied to Mega Power Projects qualified for exemption under Notification 6/2006, dated 1-3-2006, against International Competitive Bidding.

6. The exemption under the notification was subject to specific conditions, including those related to customs duties and additional levies when goods are imported into India.

7. The exemption from Customs duty under a different notification was also discussed, emphasizing the conditions related to the certification by a Joint Secretary to the Government of India in the Ministry of Power.

8. The Commissioner denied the exemption based on the classification of goods under a specific customs heading, which was not applicable to goods classified under Chapter 85 of the Central Excise Tariff.

9. The Tribunal found that the denial of exemption based on non-fulfillment of customs regulations for goods classified under a different heading was not valid. The appellants were deemed eligible for the exemption under Notification 6/2006, dated 1-3-2006, as they satisfied the conditions specified in the relevant notification. Previous tribunal decisions supporting this interpretation were also referenced.