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2017 (5) TMI 387 - AT - Central ExciseBenefit of N/N. 6/2006-CE dated 01.03.2006 - denial of benefit of notification on the ground that appellant are neither a contractor who participated in International Competitive Bidding nor sub-contractor for supply of the goods - Held that - Tribunal in the case of SARITA STEELS & INDUSTRIES LTD. Versus COMMR. OF C. EX., VISAKHAPATNAM 2010 (7) TMI 568 - CESTAT, BANGALORE has already decided that exemption cannot be denied for the reason that sub-contractor did not take part in International Competitive Bidding - relief from excise duty is not granted through the mechanism of deemed export but administered through exemption notification issued - Revenue has not made any case that any of the conditions specified in the exemption notification is not fulfilled - appeal allowed - decided in favor of assessee.
Issues:
- Appeal against Order-in-Appeal denying exemption under Notification No. 6/2006-CE - Interpretation of conditions under the exemption notification and Foreign Trade Policy - Eligibility of the assessee-Appellants for exemption as a sub-contractor Analysis: 1. Appeal against Order-in-Appeal denying exemption under Notification No. 6/2006-CE: The appeal was filed against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Jaipur-II, concerning the denial of exemption under Notification No. 6/2006-CE for goods supplied by the assessee-Appellants. The goods, including CCTV systems, were supplied to M/s BHEL for specific projects, and the Department contested the eligibility of the assessee-Appellants for the exemption. 2. Interpretation of conditions under the exemption notification and Foreign Trade Policy: The counsel for the assessee-Appellants argued that they fulfilled the conditions of Notification No. 6/2006-CE as specified in the Customs Notification No. 21/2002-Cus. The debate centered on whether the conditions of the Foreign Trade Policy needed to be satisfied for claiming the exemption. The Tribunal noted that the benefits under the exemption notification were distinct from the deemed export benefits under the Foreign Trade Policy. It was established that the conditions specified in the exemption notification were met by the assessee-Appellants, and the Tribunal emphasized that the relief from excise duty was granted through the exemption notification, not deemed export benefits. 3. Eligibility of the assessee-Appellants for exemption as a sub-contractor: The Department contended that the assessee-Appellants were not approved as a sub-contractor and, therefore, were ineligible for the exemption. However, the Tribunal clarified that it was not necessary for the manufacturer supplying goods to mega power projects to have participated in International Competitive Bidding. As long as the goods were supplied to the contractor awarded the project and installed at the project site, the exemption could be granted. The Tribunal highlighted that BHEL, as the main contractor, could have imported the goods duty-free but opted for local procurement from the assessee-Appellants, making them eligible for the exemption. In conclusion, the Tribunal set aside the impugned order and allowed the appeal, affirming the eligibility of the assessee-Appellants for exemption under Notification No. 6/2006-CE. The judgment clarified the interpretation of conditions under the exemption notification and emphasized the distinction between deemed export benefits and excise duty exemption.
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