2023 (11) TMI 1025 - AT - Central Excise

Project Import - Mega Power Project - international competitive bidding - exemption under notification 6/2006 dated 01.03.2006 - HELD THAT - The Respondent supplied components/parts/accessories to the Coal Handling plant for Barh Super Thermal Power Project. The Respondent vide their letter dated 27.11.2010 submitted a certificate issued by the Joint Secretary, Ministry of Power, to the effect that the project was a mega power project. The Project Authority Certificate dated 05.02.2007 categorically states that supply of goods under the contract to be made to the power project in India were under the procedure of international competitive bidding. The name of the Respondent was included as sub-contractor in the contract document of M/s DVC, who were responsible for completion of the mega power project. The Respondent has satisfied all the conditions required to avail the exemption as provided under Notification 6/2006 dated 01.03.2006 - the allegation of the department that the Respondent would be eligible for the exemption under Notification 6/2006 dated 01.03.2006, only if they are registered under Project Import Regulations 1986. Registration under Project Import is required only when they import the goods. In this case the Respondent has supplied goods manufactured by them domestically, for which exemption is specifically provided under notification 6/2006 dated 01.03.2006. Since, the Respondent has satisfied all the conditions required to avail the exemption under notification 6/2006 dated 01.03.2006, it is found that no infirmity in the order-in-original passed by the adjudicating authority, dropping the proceedings. Appeal filed by Revenue dismissed.

Summary

Issues:
The appeal filed by the department against the Order-in-Original dated 23.04.2013 passed by the Commissioner of Central Excise, Kolkata II, dropping the proceedings initiated in the Show Cause Notice dated 07.11.2012.

Summary:

Issue 1: Allegation of failure to produce evidence of exemption from customs duty
The Appellant contended that the Respondent did not provide evidence that the goods were exempted from customs duties when imported into India. The Appellant argued that the goods supplied were not eligible for classification under the Customs tariff attracting a 'Nil' rate of duty, as the Project Authority failed to register the project under the Project Import Regulations, 1986.

Issue 2: Eligibility for exemption under Notification 6/2006 dated 01.03.2006
The Respondent asserted that the project was set up based on tariff-based competitive bidding, making them eligible for the exemption under Notification 6/2006 dated 01.03.2006. They argued that registration under Project Import Regulations, 1986 was not a prerequisite to avail the exemption, as the goods supplied were for a mega power project set up through international competitive bidding.

The Tribunal observed that the Respondent supplied components to the Coal Handling plant for a mega power project, as evidenced by certificates from the Ministry of Power and the Project Authority. The Respondent's inclusion as a sub-contractor in the project document further supported their eligibility for the exemption under Notification 6/2006 dated 01.03.2006. The Tribunal found that the Respondent had fulfilled all conditions required to avail the exemption, dismissing the department's claim that registration under Project Import Regulations, 1986 was mandatory. Consequently, the Tribunal upheld the Order-in-Original and rejected the department's appeal.

In conclusion, the Tribunal rejected the department's appeal based on the Respondent's compliance with the conditions for exemption under Notification 6/2006 dated 01.03.2006.