2018 (2) TMI 815 - HC - Central Excise

Benefit of N/N. 6/2006-C.E., dated 1-3-2006 - electric wires and cables - non-fulfillment of conditions of notification - Whether the Tribunal was justified in holding that electric wires and cables falls under the heading 98.01 of Customs Tariff Act, 1975 and thus entitled for exemption under Notification No. 6/2006-C.E., dated 1-3-2006? - penalty. Held that - wires and cables is only for project therefore, ultimately it has to be applied under the provisions of law with the ultimate object of the project and not for creating a hurdle in the creation of any industry - The man who has been assigned the work was authorised to certify and it was not fault of the assessee. It was fault of representative of the department being a part of Central Government, which is a creation of Government therefore, for omission on the part of the representative of Government, assessee cannot be penalised - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Interpretation of Notification No. 6/2006-C.E. for exemption on electric wires and cables.
2. Classification of electric wires and cables under Customs Tariff Act.
3. Competency of the authority issuing the exemption certificate.

Issue 1: Interpretation of Notification No. 6/2006-C.E.:
The appellant challenged the Tribunal's decision granting exemption under Notification No. 6/2006-C.E. for electric wires and cables despite non-fulfillment of conditions. The appellant argued that the Tribunal erred in reversing the Commissioner of Customs' finding. The Tribunal, however, held that the wires and cables fell under Chapter Heading 98.01 of the Customs Tariff Act, making them eligible for the exemption. The Tribunal emphasized that the items were essential for setting up a Power Project, aligning with the exemption criteria.

Issue 2: Classification under Customs Tariff Act:
The Tribunal's observation clarified that electric wires and cables were classifiable under Chapter Heading 98.01 of the Customs Tariff Act, supporting their eligibility for the exemption under Notification No. 6/2006-C.E. The Tribunal highlighted that all machinery components required for setting up a Power Project were classified under this heading, ensuring the applicability of the exemption to the subject items.

Issue 3: Competency of the authority issuing exemption certificate:
The respondent contended that the exemption certificate was issued by an incompetent authority, challenging the appellant's eligibility for exemption. However, the Tribunal noted that the certificate was issued by an authorized Project Authority, specifically the Additional General Manager of NTPC, validating the appellant's entitlement to the exemption. The Tribunal emphasized that any fault in certification lay with the Government representative, not the appellant, absolving the latter of any penalization.

In conclusion, the High Court upheld the Tribunal's decision, ruling in favor of the appellant against the department. The judgment emphasized the correct interpretation of the Notification, classification under the Customs Tariff Act, and the validity of the exemption certificate issued by the competent authority. The appeal was dismissed in favor of the appellant.