2013(08)LCX0048

IN THE CESTAT, PRINCIPAL BENCH, NEW DELHI

Ms. Archana Wadhwa, Member (J) and Shri Sahab Singh, Member (T)

Om Metals Spml Jv Unit 2

Versus

Commissioner of Central Excise & Service Tax, Jaipur

Final Order No. 57347/2013-EX(PB), dated 13-8-2013 in Appeal No. E/1963/2012-EX(DB)

Cases Quoted -

Sarita Steels and Industries Ltd. v. Commissioner - 2011 (264) ELT 0313 (Tribunal) - Followed [Para 9]

Advocated By -

Ms. B.L. Narsimhan, Advocate, for the Appellant.
Shri V.K. Srivastava, DR,for the Respondent.

[Order per : Sahab Singh, Member (T)]. -

This appeal is filed by M/s. Om Metals (hereinafter referred to as appellants-assessee) against the Order-in-Original No. 34-35/2012, dated 11-4-2012 passed by Commissioner of Central Excise, Jaipur.


2. Appellant are manufacturer of Gate and Gate Parts falling under Chapter 73 of the Central Excise Tariff and they are availing Cenvat credit facility provided under the Cenvat Credit Rules, 2004. The appellants were awarded a tender for supply of all equipments and materials including mandatory tools and tackles and mandatory spares for Lot - of Hydro mechanical works of Parbati Hydro Electricity Project (Stage-Ill), Himachal Pradesh. This was a 520 MW (4 x 130 MW) project. M/s. National Hydroelectric Power Corporation Ltd. (for short the 'NHPC') issued a Global Invitation, dated 28-10-2005, for pre-qualification of eligible candidates for International Competitive Bidding in respect of 3 projects, of which the Parbati H.E. project was one. Consequently an invitation was issued by NHPC to all pre-qualified bidders to bid for the project. The appellants too were invited vide NHPC letter NH/Contracts (Civil)HM/Lot-3/Parbati III/PR-212/5722, dated 31-10-2006. The contract was awarded to the appellants and agreement between the appellants and NHPC was signed on 20-8-2007.


3. Appellants claimed exemption under Notification No. 6/2006, dated 1-3-2006 against S. No. 91 of the table annexed to the Notification. Entry 91 specifies rate of duty Nil in respect of "All goods supplied against International Competitive Bidding" subject to the condition No. 19, which reads as under :-

"If the goods are exempted from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under Section 3 of the said Customs Tariff Act when imported into India."

"Further S. No. 400 of Notification No. 21/2002-Cus., dated 1-3-2002 exempts the following from the entire duties of customs

"Goods required for setting up of any Mega Power Project specified in List 42 if such Mega Power Project is -

An inter-State thermal power plant of a capacity of 1000 MW or more, or

An inter-State hydel power plant of capacity of 500 MW or more, as certified by an officer not below the rank of a Joint Secretary to the Government of India in the Ministry of Power."

This exemption is subject to fulfilment of Condition No. 86 of Notifica-tion.

Department was of the view that appellants do not satisfy the conditions of Notification and accordingly two Show Cause Notices dated 12-4-2011 and 15-12-2011 were issued to the appellants demanding duty along with interest under Section 11A and Section 11AB of the Act and also proposing penalty on the appellant under Rule 25 of the Central Excise Rules. These Show Cause Notices were confirmed by the Commissioner vide impugned order. Appellants have challenged this order in the present appeal.

Heard both sides.

We find that the issue involved in the present appeal is whether goods Gate and Gate Parts classifiable under Chapter 73 of the Central Excise Tariff cleared to Mega Power Project against International Competitive Bidding are entitled to exemption from duty under Notification 6/2006, dated 1-3-2006.

Serial No. 91 of Notification No. 6/2006-C.E., dated 1st March, 2006

provides as under :-


Under this notification goods supplied against International Competitive Bidding are exempted subject to Condition No. 19 of the Notification.

Condition No. 19 reads as under :-

"19. If the goods are exempted from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under Section 3 of the said Customs Tariff Act when imported into India."


7. The exemption from Customs duty is provided at S. No. 400 of the table of Notification 21/2002, dated 1-3-2002 which reads as under :-

The exemption against S. No- 400 is subject to Condition 86 which reads as under :-

(a) If an officer not below the rank of a Joint Secretary to the Government of India in the Ministry of Power certifies that -

(i) The power purchasing State has constituted the Regulatory Commission with full powers to fix tariffs;

(ii) The power purchasing State undertakes, in principle, to privatize in distribution in all cities, in that State, each of which has a population of more than one million, within a period to be fixed by the Ministry of Power; and

(ii) The power purchasing State has agreed to provide recourse to that State's share of Central Plan allocations and other devolu-tions towards discharge of any outstanding payment in respect of purchase of power;

(a) In the case of imports by a Central Public Sector undertaking, the quantity, total value, description and specifications of the imported goods are certified by the Chairman and Managing Director of the said Central Public Sector Undertaking; and

(b) In the case of imports by a Private Sector Project, the quantity, total value, description and specifications of the imported goods are certified by the Chief Executive Officer of such project.


8. The appellants submitted the certificates issued by the Joint Secretary, Government of India, Ministry of Power and these certificates were examined by the Commissioner and in para 24 of the order he held that certificates are not in dispute and condition No. 86 stands satisfied. The Commissioner has denied the exemption under Notification No. 6/2006, dated 1-3-2006 on the ground that S. No. 400 of the Notification No. 21/2002, dated 1-3-2006 applies to goods classifiable under Chapter 98.01 of the Customs Tariff and for availing the benefit of Notification 21/2002 for goods of 98.01 requirements of Project Import Regulation, 1986 are to be satisfied and he denied the benefit of Notification to their goods Gate & Gate Parts classifiable under Chapter 73 of the Tariff for non-fulfilment of Project Import Regulation, 1986.


9. We find that goods in question are classifiable under Chapter 73 of the Tariff. Under Central Excise Tariff there is no Heading 98.01 and which exists in Customs Tariff only. Since the goods manufactured in India can not be classified under 98.01 of the Central Excise Tariff, denial of the exemption on the ground of non-fulfilment of condition of Project Import Regulation is not sustainable particularly when condition No. 86 of the Notification No. 21/2002, dated 1-3-2002 is fulfilled by them. Similar submissions were made by Revenue for denying the benefit of Notification 6/2006, dated 1-3-2006 on the ground of non-fulfilment of conditions of the Project Import Regulation in case of Sarita Steels and Industries Ltd. reported in 2011 (264) ELT 313 and Tribunal in that case allowed the exemption under Notification 6/2006, dated 1-3-2006 to the assessee. We therefore hold that appellants are eligible for exemption under Notification 6/2006, dated 1-3-2006 and accordingly set aside the impugned order and allow the appeal.

(Order pronounced in the open Court)

Equivalent 2013 (298) ELT 0079 (Tri. - Del.)