2019 (12) TMI 111 - AT - Central Excise

Goods supplied to Mega Power Projects under International Competitive Bidding - benefit of N/N. 6/2006-CE dated 01.03.2006 (serial no. 91) and subsequent N/N. 12/2012-CE dated 17.03.2012 (serial no. 336) - exemption denied on the ground that the subject goods are not unconditionally exempted from customs duty when imported into India as per the corresponding Customs N/N. 21/2002-Cus dated 01.03.2002 as amended and subsequent N/N. 12/2012-Cus dated 17.03.2012 as amended - HELD THAT - The goods have been cleared by the appellants to the specified Mega Power Projects against International Competitive Biddings and the said facts have duly been recorded in the impugned order and there is no dispute on the said facts. The notifications under which exemptions have been claimed by appellants are subject to condition that the said goods, when imported into India, are exempted from payment of customs duty. In the instant case, since the goods have been supplied for setting up of Mega Power Projects, we find that the learned Commissioner in his adjudication order has not negated the submissions made by the appellant regarding the availability of the exemptions from customs duty. Had the said goods been imported from outside India, the same would have been eligible for exemption as projects import as available under the aforesaid Notification 21/2002. The entries in the Excise Exemption Notifications as availed by the assessee appellant in column No. (2) for reference of Chapter or heading specifically states Any Chapter , which clearly implies that goods sought to be cleared by assessee under the said exemption entries may fall under any of the chapter headings of central excise tariff with the only condition that they are supplied under International Competitive Bidding which are exempted from customs duty - The observation made by the learned Commissioner to deny the exemption that the goods manufactured by appellant i.e. cable tray and accessories falling under chapter subheading 73089090 which is used as support for laying the cable that is structures cannot be treated as machines, spare parts or raw materials to be used in making such goods of chapter 84 is completely irrelevant for the reason that goods falling under any of the chapter headings of Central Excise Tariff is exempted. The supply of subject goods in the instant case for Mega Power Project under International Competitive Bidding is on record and not in dispute - the appellant is legally entitled to exemption from payment of central excise duty and thus the duty demand is not sustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Central excise duty demand along with penalty and interest confirmed by the Commissioner of Central Excise, Kolkata challenged by the appellant.
2. Exemption from central excise duty under specific notifications for goods supplied to Thermal Power Projects disputed by the Commissioner.
3. Applicability of customs duty exemptions to goods supplied for Mega Power Projects.
4. Legal sustainability of denial of excise exemption based on classification and conditions of project imports.

Analysis:
1. The appellant, M/s. Industrial Performation (India) Pvt. Ltd., filed an appeal against the demand of central excise duty, penalty, and interest imposed by the Commissioner of Central Excise, Kolkata. The demand pertained to the period from 27.09.2010 to 30.09.2015.
2. The appellant supplied Cable Tray with accessories to Thermal Power Projects, claiming exemption from central excise duty under specific notifications. The Commissioner denied the exemption, stating that the goods must be unconditionally exempted from customs duty when imported into India, which the subject goods were not.
3. The Tribunal found that the goods were supplied for Mega Power Projects against International Competitive Biddings, making them eligible for customs duty exemption as 'project imports.' The Tribunal noted that the Commissioner did not negate the submissions regarding customs duty exemptions and set aside the impugned order based on previous Tribunal decisions.
4. The Tribunal highlighted that the denial of excise exemption based on classification under Chapter 9801 was legally unsustainable. The Commissioner's observation regarding the goods' classification and conditions for project imports was deemed irrelevant, as the goods were supplied under International Competitive Bidding and exempted from customs duty. The Tribunal concluded that the appellant was entitled to exemption from central excise duty, and the duty demand was not sustainable.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's decision on each aspect of the case.