2015 (6) TMI 863 - AT - Central Excise

Exemption to goods required for petroleum operations of ONGC - Benefit of Notification No. 6/06-CE - Non fulfillment of condition regarding production of certificate from Directorate General of Hydro Carbon - Held that - Appellant had supplied the goods, in question, by availing full duty exemption under Notification No. 6/06-CE (SI. No. 19) against international competitive bidding to M/s Essar Offshore Subsea Ltd. who were to use these goods for petroleum operations of ONGC in ONGC - Neelam Heera Reconstruction Project. There is also no dispute that the same goods if imported into India would be exempt from basic customs duty as well as additional customs duty in terms of SI. No. 214 of the table to the notification subject to the fulfillment of the certain conditions prescribed - condition No. 29 referred of the Notification No. 21/02-CUS (SI. No. 214) regarding production of a prescribed certificate for Directorate General of Hydro Carbons is not applicable to the sub-contractors who are domestic manufacturers. In view of this, the impugned order is not sustainable. The same is set aside. - Decided in favour of assessee.

Summary

Issues:
1. Duty exemption under Notification No. 6/06-CE denied due to non-production of certificate from Directorate General of Hydro Carbons.

Analysis:
The appellant, engaged in the manufacture of specific goods chargeable to Central Excise Duty, cleared goods to a contractor without payment of duty under Notification No. 6/06-CE. The goods were intended for a project of ONGC. The dispute arose as the required certificate from Directorate General of Hydro Carbons was not produced, leading to a duty demand of Rs. 71,492 being confirmed against the appellant. The Commissioner (Appeals) upheld this decision, prompting the appellant to file an appeal along with a stay application.

The Tribunal, after waiving the pre-deposit requirement, heard the matter for final disposal. The appellant contended that as a sub-contractor, they had supplied goods against international competitive bidding and would be exempt from customs duty under Notification No. 21/02-CUS, except for the issue of the certificate. The appellant cited a judgment in a similar case by the Bombay Bench of the Tribunal to support their argument that the certificate requirement did not apply to domestic manufacturers acting as sub-contractors.

The Departmental Representative defended the impugned order, reiterating the findings of the Commissioner (Appeals). The Tribunal considered the submissions and records, noting that the issue of the certificate requirement for sub-contractors had been decided in favor of the appellant by the Bombay Bench's judgment. Consequently, the impugned order denying duty exemption was deemed unsustainable and set aside. The appeal and stay application were allowed.

This judgment clarifies the applicability of certificate requirements for duty exemptions under specific notifications, particularly in cases involving sub-contractors who are domestic manufacturers. The decision underscores the importance of fulfilling prescribed conditions for availing duty exemptions and the significance of relevant case law in interpreting such conditions.