2015 (8) TMI 96 - SC - Customs

Denial of project import benefit - power generation project - 1MW capacity - power generated plant is exclusively use for the sister concern of the appellant - benefit of exemption Notification 21/2002 Cus dated 1.3.2002 - Held that - the Tribunal has rightly held that 1MW plant of the appellant cannot be treated as power generation project. For this purpose, the Tribunal has relied upon the decision of Union of India and Others vs. Indian Charge Chrome and Another - 1999 (8) TMI 69 - SUPREME COURT OF INDIA wherein the definition between a power project and power plant is drawn - No fault in impugned order - Decided against assessee.

Summary

Issues:
1. Interpretation of exemption Notification 21/2002 Cus dated 1.3.2002.
2. Determination of eligibility for project import benefit under Heading 98.01 of the Customs Tariff Act, 1975.
3. Classification of a 1MW power plant as a power generation project.

Analysis:
1. The appellant sought the benefit of exemption Notification 21/2002 Cus dated 1.3.2002 under serial No.399 sub-clause (iv) for the import of a 'Waukeshah Enginator, Model VHP 5904 GSI, Gas Enginator Generating System.' The Tribunal examined the relevant portion of Sl.No.399, which includes power generation projects, and noted that the appellant's 1MW power plant was exclusively for the appellant's sister concern and not for public consumption. Citing the decision in Union of India and Others vs. Indian Charge Chrome and Another, the Tribunal distinguished between a power project and a power plant, emphasizing that a captive power plant for internal consumption does not qualify as a power generation project. Consequently, the Tribunal upheld the denial of the project import benefit under the exemption notification.

2. The appellant had initially applied for registration of 'Contract Registration' under Heading 98.01 of the Customs Tariff Act, 1975, which was rejected by the adjudicating authority. Subsequent appeals to the Commissioner (Appeals) and the CEGAT were also unsuccessful in establishing the appellant's entitlement to project import benefit. The appellant's argument to align the import under the relevant sub-clause of the exemption notification was dismissed based on the specific nature of the power plant and its usage.

3. The Tribunal's decision to uphold the denial of the project import benefit centered on the classification of the appellant's 1MW power plant. By referencing the distinction between a power project and a power plant as outlined in the industrial policy resolution, the Tribunal concluded that the appellant's power plant, being for captive consumption and not for public distribution, did not meet the criteria of a power generation project under the exemption notification. The Tribunal's reliance on the definition provided in the Union of India and Others vs. Indian Charge Chrome and Another case supported the finding that the appellant's power plant did not qualify as a power generation project. Consequently, the appeal was dismissed by the Supreme Court, affirming the Tribunal's decision.

In summary, the Supreme Court dismissed the appeal, upholding the Tribunal's decision that the appellant's 1MW power plant, intended for captive consumption by a sister concern and not for public distribution, did not qualify as a power generation project under the exemption notification, thereby denying the project import benefit sought by the appellant.