2017 (7) TMI 933 - AT - Central Excise

Benefit of N/N. 6/2006-CE dated 01/03/2006 - manufacture of Hydel gates and parts thereof - The benefit under the said notification was claimed by the appellant on the ground that the goods were cleared to NTPC under International Competitive Bidding - Held that - condition No. 86 (b) (entry No.400) is required to be fulfilled in case of import of goods by the Central Public Sector Undertaking. The said condition does not have been any application with regard to manufacture of excisable goods within the factory. Thus, reliance placed by the learned Commissioner (Appeals) on the said condition in order to deny the benefit of exemption is not correct and proper. As regards non-registration under the project import regulation, the Department had not proposed for the said aspect in the show cause notice - the Tribunal in the case of appellant itself 2013 (11) TMI 1361 - CESTAT NEW DELHI has also held that project import registration is not required for obtaining duty exemption contained in notification dated 01/03/2006. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against order denying duty exemption under Notification No.6/2006-CE dated 01/03/2006
- Fulfillment of conditions under Notification No.21/2002-CUS
- Applicability of conditions for import in case of domestic manufacture
- Requirement of project import registration for duty exemption

Analysis:
1. Appeal against Order Denying Duty Exemption:
The appellant, engaged in manufacturing Hydel gates and parts falling under Chapter 73 of the Central Excise Tariff Act, availed duty exemption under Notification No.6/2006-CE dated 01/03/2006. However, the Department issued a show cause notice denying the exemption, leading to an adjudication confirming Central Excise duty and imposing a penalty. The Commissioner (Appeals) upheld the demand, prompting the appellant to appeal.

2. Fulfillment of Conditions under Notification No.21/2002-CUS:
The appellant argued that it fulfilled Condition No. 86 of Notification No.21/2002-CUS by obtaining a certificate from the Joint Secretary in the Ministry of Power. The appellant contended that the condition in sub-clause (3) was not applicable during the relevant period. The Tribunal found that the condition relied upon by the Commissioner (Appeals) was deleted in a subsequent notification, rendering the denial of exemption on this ground incorrect.

3. Applicability of Conditions for Import in Case of Domestic Manufacture:
The appellant contended that Condition No. 86 (b) of the notification was not applicable to domestic manufacture, as it pertained to import by Central Public Sector Undertakings. The Tribunal agreed, stating that this condition did not apply to the manufacture of excisable goods within the factory. The reliance on this condition by the Commissioner (Appeals) to deny the exemption was deemed improper.

4. Requirement of Project Import Registration for Duty Exemption:
The Department alleged that the appellant was not registered under project import regulations, which the Commissioner (Appeals) used to deny the exemption. However, the Tribunal noted that this allegation was not part of the show cause notice. Moreover, the Tribunal had previously ruled that project import registration was not a prerequisite for obtaining duty exemption under the relevant notification.

5. Conclusion:
After thorough analysis, the Tribunal found no merit in the impugned order. Consequently, the order was set aside, and the appeal was allowed in favor of the appellant. The Tribunal's decision was based on the incorrect application of conditions and requirements by the Commissioner (Appeals) in denying the duty exemption to the appellant.