2019 (3) TMI 665 - AT - Central Excise

Clearances towards international bidding - benefit of N/N. 6/2006-CE dt. 1.3.2006 - Held that - The conditinoalities that are required to be fulfilled to avail exemption of the impugned goods when they are imported under a customs exemption notification cannot be insisted upon in respect of the clearances made by the domestic manufactures, for example under Notification No.6/2006-CE. Coming to the Ld. A.R s contention that respondents are neither a contractor nor a sub-contractor but only a supplier, the Commissioner (Appeals) in para-6 of the impugned order has observed that it is not in dispute that respondent has supplied certain process equipments to Cairn Energy India Pvt. Ltd. for use in Petroleum Exploration Operation against international competitive bidding. So also, we find that in para-2 of both the SCNs, it has been clearly indicated that respondent had cleared processed equipment to M/s.GEA Cooling Tower Technologies India Pvt. Ltd. and that the goods were further consigned to M/s.Cairn Energy India Pvt. Ltd. - Thus there is no dispute on the fact that goods have indeed been supplied for the purpose of petroleum exploration operations to the sub-contractor and from thereon to the main contractor. In the circumstances, this particular argument of the Ld. A.R will not succeed. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Whether the exemption under Notification No.6/2006-CE is subject to specific conditions regarding goods imported into India.
- Whether the requirement of producing a certificate from the Directorate General of Hydro Carbons (DGHC) for exemption under customs duty applies to domestically manufactured goods.
- Whether the case laws cited by both parties support their respective contentions.

Analysis:

1. Exemption Conditions for Imported Goods:
The Department contended that the exemption under Notification No.6/2006-CE is subject to the condition that goods are exempted from payment of customs duty and additional customs duty when imported into India. The show cause notices issued proposed demands of duty for clearances made without fulfilling these conditions. However, the Commissioner (Appeals) held that the condition for production of a certificate applies only to imported goods, not domestically manufactured ones. This interpretation was supported by the judgment in Kent Introl Pvt. Ltd., where the Bombay High Court clarified that certain conditions under the notification are applicable only to importers, not domestic manufacturers.

2. Certificate Requirement for Domestic Manufacturers:
The Department argued that the requirement of producing a certificate from DGHC is a substantive requirement for claiming exemption under Notification No.6/2006-CE. However, the Respondents relied on the judgment in Alstom T & D (India) Ltd., where it was held that the conditions for exemption do not apply to the supplier of goods meant for use in specific projects. The Tribunal emphasized that the conditionalities for imported goods cannot be insisted upon for clearances made by domestic manufacturers under the said notification.

3. Interpretation of Case Laws:
The case laws cited by both parties were crucial in determining the applicability of exemption conditions. While the Department highlighted the distinction between contractors and suppliers, the Tribunal found that the Respondents had indeed supplied goods for petroleum exploration operations, aligning with the conditions for exemption. The judgments in Kent Introl Pvt. Ltd. and Alstom T & D (India) Ltd. supported the Tribunal's conclusion that the conditions for imported goods do not necessarily apply to domestically manufactured products.

In conclusion, the Tribunal dismissed the Department's appeal, upholding the Commissioner's decision to set aside the demands of duty and penalties. The judgment emphasized that the conditions for exemption under Notification No.6/2006-CE should be interpreted in the context of domestically manufactured goods, and the requirements for imported goods cannot be uniformly applied.