2013 (10) TMI 1245 - AT - Central Excise

Supply of transformers for setting up a mega power project at Tamnar (Raigarh). - Entitlement for Duty free Exemption under Notification No. 6/2006 - Revenue was of the view that the Project Authority Certificate has been issued under clause 8.2 (g) of Chapter 8 of the Foreign Trade Policy and not under clause 8.2 (f) of the Chapter/Policy Held that - Whatever has been stated at serial No.1 of the certificate is not relevant for granting the benefit of Exemption Notification and is relevant only for the purpose of Foreign Trade Policy - Chapter 8 of the Foreign Trade Policy deals with deemed export - Clause 8.2 lists out the categories of supply which will be considered as deemed export for the purpose of Foreign Trade Policy. A bare reading of the clause (f) would indicate that supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits import of such goods at zero percent duty, is given the benefit of deemed export - clause (g) states that the supply of goods to power projects and refineries even if not covered by clause (f) above will get the deemed export benefit - clause (e) or clause (g) is relevant for granting the deemed export benefit and has no relevance whatsoever for granting exemption under Notification 6/2006-CE - the benefit of the Exemption Notification has been correctly availed - demand of duty set aside - Since the demand of duty had set aside, the interest and penalties on all the notices do not survive Decided in favour of Assessee.

Summary

Issues:
Two appeals filed against confirmation of duty, interest, and imposition of penalty, and nine other appeals filed against imposition of penalties.

Analysis:
1. Confirmation of Duty, Interest, and Penalty:
- The main appellant, a transformer manufacturer, supplied goods to a power project under a specific excise notification.
- Dispute arose as the Project Authority Certificate was issued under a different clause than required for duty-free clearance.
- Notification 6/2006-CE exempts goods supplied against International Competitive Bidding from excise duty subject to conditions.
- The relevant Customs Notification 21/2006 provides exemption for goods required for setting up a Mega Power Project.

2. Certificate Requirement Dispute:
- The Customs duty exemption is subject to condition 86, which requires specific certifications.
- The certificates from the Project Authority were produced, meeting most requirements except the Chief Executive Officer's certification.
- The Tribunal found the certificates sufficient for availing the exemption under the Notifications.

3. Deemed Export Benefit vs. Exemption Notification:
- Analysis of Foreign Trade Policy's clause 8.2 (g) regarding deemed export for power projects.
- The Tribunal clarified that clauses relevant for deemed export benefits are different from those for duty exemption.
- Emphasized that clause (e) or (g) of the Policy is relevant for deemed export benefits, not for exemption under Notification 6/2006-CE.

4. Judgment and Conclusion:
- The Tribunal held that the Exemption Notification was correctly availed, setting aside the demand for duty.
- Consequently, interest and penalties on all notices were not applicable and were set aside.
- As a result, all appeals were allowed, and the operative part of the judgment was pronounced in court.

In summary, the judgment resolved the issues related to duty confirmation, certificate requirements, and the distinction between deemed export benefits and duty exemptions. The Tribunal found in favor of the appellant, allowing the appeals and setting aside the demands for duty, interest, and penalties based on the correct interpretation of relevant notifications and certifications.