2017 (3) TMI 1002 - AT - Central Excise

Benefit of N/N. 6/2006-CE dated 1.3.2006 - denial on the ground that the appellant had not participated in ICB and that he had imported the raw material - whether appellant is eligible to avail the benefit of N/N.91/2004-Cus and 6/2006-CE in respect of the goods supplied to Power Project implemented by bidding through an International Competitive Bidding (ICB)? - Held that - similar issue was before the Bench in respect of the Notification precursors the N/N. 6/2006-CE and 91/2004-Cus in the case of CST Ltd 2007 (6) TMI 369 - CESTAT, BANGALORE , where it was held that There is always a system of sub-contractors. If we take a view that the goods cleared by sub-contractors are not entitled for exemption on the ground they are not the bidders, the very purpose of the Notification would be defeated because the main contractor will be having hundreds of sub-contractors in Mega Projects - the appellant cannot be denied the benefit of N/N. 6/2006-CE and 91/2004-Cus for the goods supplied to the Project Implementing authority for the said project - appeal allowed - decided in favor of appellant.

Summary

Issues:
Applicability of Notification No.91/2004-Cus and No.6/2006-CE for goods supplied to Power Project through International Competitive Bidding (ICB).

Detailed Analysis:

Issue 1: Eligibility for Exemption under Notification No.91/2004-Cus and No.6/2006-CE
The appellant sought exemption from central excise duty for goods supplied to a power project based on a certificate issued by the Project Implementation Authority. The lower authorities denied the exemption, stating it was only applicable to materials required in the final product, not the final product itself. The appellant argued that the exemption should apply as they were mentioned as a sub-contractor in the project and relied on precedents where similar exemptions were granted. The Revenue contended that since the appellant did not participate in the International Competitive Bidding (ICB) and imported raw materials, they were not eligible for the exemption.

Issue 2: Interpretation of Notification Conditions
The Tribunal analyzed the conditions of the exemption notification and previous judgments to determine eligibility. It was established that the goods imported for supply to Mega Projects were entitled to duty exemption under the Customs Tariff Act. The Tribunal clarified that the appellant, as a sub-contractor, supplying goods to the main contractor involved in ICB, satisfied the condition of "goods supplied against International Competitive Bidding." The Tribunal emphasized that the purpose of the notification would be defeated if sub-contractors were denied exemption solely for not being the bidders themselves.

Issue 3: Precedents and Judicial Pronouncements
The Tribunal referred to previous cases where similar issues regarding the applicability of Notification No.6/2006-CE were resolved in favor of the appellants who had not participated in ICB. Citing authoritative judicial pronouncements, the Tribunal concluded that the appellant in the present case cannot be denied the benefit of the notifications for goods supplied to the Project Implementing authority for the power project.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal, emphasizing the appellant's eligibility for the exemption under Notification No.91/2004-Cus and No.6/2006-CE for supplying goods to the power project through International Competitive Bidding.