2024 (10) TMI 5 - AT - Central Excise

Exemption eligibility based on power project capacity - Interpretation of N/N. 46/2008 - for the purpose of Notification No.46/2008 dated 14.08.2008 whether the capacity of each unit/plant to be taken for eligibility of the exemption Notification which prescribes the capacity of 3960 MW or above or total capacity of all the units in the project should be considered? - HELD THAT - This issue is no longer resintegra as the same has been considered by this Tribunal in CROMPTON GREAVES LTD. 2015 (10) TMI 1916 - CESTAT NEW DELHI where it was held that ' In the Office Memorandum dated 20-10-2011 emanating from the Under Secretary, Ministry of Power it is clarified that mega/ultra mega power projects wherein the capacities of a number of units totals up to at least 1000 MW are eligible to avail the requisite benefits under the mega status certificate, issued in terms of condition No. 86 of Notification No. 6/2006- C.E., dated 1-3-2006. Board proceeding dated 21-8-2012 also reiterates this position. Ld. AR for Revenue states that in the circumstances the issue is now settled in favour of the assessee.' Thus, it is settled that it is not the capacity of individual plant but the total capacity of the project consisting of multiple plant has to be considered. Therefore, in the present case the total capacity of the mega power project is 4000 MW. Accordingly it satisfies the condition of the notification. The impugned order set aside - appeal allowed.

Summary

Issues:
Interpretation of Notification No. 46/2008 for exemption eligibility based on power project capacity.

Analysis:
The case involved a dispute regarding the eligibility of exemption under Notification No. 46/2008 for the supply of 'transformer oil' to a mega power project. The appellant, engaged in manufacturing petroleum oil products, supplied Transformer Oil to M/s Coastal Gujarat Power Limited for their Ultra Mega Power Project. The dispute arose as the department alleged that the individual installed capacity of 800MW for each of the 5 power plants in the project did not meet the threshold capacity of 3960MW specified in the notification. Consequently, a demand for excise duty was raised, leading to the issuance of a Show Cause Notice and subsequent confirmation of duty demand by the Additional Commissioner.

The appellant contended that the total capacity of the project, consisting of 5 power plants with 800MW each, amounted to 4000MW, satisfying the notification's criteria. The appellant argued that a clarificatory amendment with retrospective effect supported their position and that the demand was time-barred due to no suppression of facts. The appellant cited various judgments, including Crompton Greaves Ltd. and M/s Rabi Engineering Works Pvt. Ltd., to support their interpretation of the notification based on total project capacity rather than individual plant capacity.

The Tribunal considered the submissions and previous judgments, concluding that the issue was no longer res-integra. Relying on the precedents, the Tribunal held that the total capacity of the project should be considered for exemption eligibility, not the capacity of individual plants. As the total capacity of the mega power project in question was 4000MW, meeting the notification's requirement, the appeals were allowed, setting aside the impugned order and granting relief to the appellant.

In light of the settled legal position established by previous judgments, the Tribunal ruled in favor of the appellant, emphasizing that the total capacity of the project, rather than individual plant capacity, determines eligibility for exemption under Notification No. 46/2008. The judgment highlighted the importance of considering the cumulative capacity of all units within a project when assessing exemption criteria, providing clarity on the interpretation of such notifications in the context of mega power projects.