Custom, Excise & Service Tax Tribunal
M/S. Paramount Communication Ltd vs Commissioner Of Central Excise on 23 June, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Excise Appeal No. 1671 & 1672/2008
[Arising out of Order-In-Appeal No. 18-19/2008 (CE)/Commr dated 13/22.5.2008 passed by Commissioner of Central Excise, Jaipur ]
For approval and signature:
Hon'ble Ms. Archana Wadhwa, Member (Judicial)
Hon'ble Mr. V Padmanabhan, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Paramount Communication Ltd. Appellants
Vs.
Commissioner of Central Excise Respondent
Jaipur Appearance:
Ms. Rinky Arora, Advocate for the Appellants Shri Yogesh Agarwal, DR for the Respondent CORAM:
Hon'ble Ms Archana Wadhwa, Member (Judicial) Hon'ble Mr. V Padmanabhan, Member (Technical) Date of Hearing : 14.06.2016 Date of Decision : 23.06.2016 FINAL ORDER NO . 52166-52167 /2016 Per V Padmanabhan:
The appellant is engaged in the manufacture of insulated wire and cables falling under Chapter heading 85.44 of the Central excise Tariff. They supplied instrumental cables to Mega Thermal Power plant being set up by M/s. NTPC and M/s. Jindal Power Ltd. and claimed the benefit of exemption Notification No. 6/2006 CE dated 1.3.2006. The benefit claimed was disallowed by the original adjudicating authority vide its order dated 13.5.2008 /22.5.2008 which has been challenged before us.
2.?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 -
(a) An inter-State thermal power plant of a capacity of 1000 MW or more, or
(b) 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 fulfillment of Condition No. 86 of Notification.
3. Department was of the view that appellants do not satisfy the conditions of Notification and accordingly Show Cause Notice dated 28-7-2007 was 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. The Show Cause Notice was confirmed by the Commissioner vide impugned order. Appellants have challenged this order in the present appeal.
4.? Even though the appellants produced certificate issued by the Joint Secretary to the Government of India, Ministry of Power as required under condition No. 86 of the Customs Notification No. 21/2002, the Commissioner took a view that the benefit of the notification cannot be given since the benefit was availed only on those goods which are classifiable under heading 98.01 of the Customs Tariff Act. Further, he has taken the view that since the appellant has not satisfied the formality of proper registration of the contract at Port which is mandatory under Customs heading 98.01, the exemption will not be available to the assessee. The appellant has challenged this finding by the arguments that the provisions of Customs Notification cannot be imported into the Central Excise Notification unless there is a specific stipulation in relation to Central Excise Notification. Such an interpretation of the exemption notification would create the impossible condition to be fulfilled for extending the benefit. They further argued that condition No. 19 of the Notification No. 6/2006 CE was that if similar goods are exempted when imported, the benefit will be available.
5. Heard Ms. Rinky Arora, learned advocate appearing for the appellant and Shri Yogesh Agarwal, learned DR appearing for the Revenue and perused the records.
6.?We find that the issue involved in the present appeal is whether goods Wire and cables classifiable under Chapter 85 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 :-
S. No. Chapter or Heading No. or sub-heading Description of goods Rate under the First Schedule Rate under the Second Schedule Condition No. (1) (2) (3) (4) (5) (6) 91 Any Chapter All goods supplied against International Competitive Bidding Nil Nil 19 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 :-
S. No. Chapter or Heading No. or sub-heading Description of goods Stand- ard rate Addi-tional duty rate Condition No. (1) (2) (3) (4) (5) (6) 400 9801 Goods required for setting up of any Mega Power Project, that is to-
(a) an inter-state thermal power plant of a capacity of 1000 MW or more; or
(b) an inter-state hydel power plant 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.
Nil Nil 86 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
(iii) The power purchasing State has agreed to provide recourse to that States share of Central Plan allocations and other devolutions towards discharge of any outstanding payment in respect of purchase of power;
(b) 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
(c) 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 16.4 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 Wire and cables classifiable under Chapter 85 of the Tariff for non-fulfillment of Project Import Regulation, 1986.
9.?We find that goods in question are classifiable under Chapter 85 of the Tariff. Under Central Excise Tariff there is no Heading 98.01 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-fulfillment 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-fulfillment of conditions of the Project Import Regulation in case of Sarita Steels and Industries Ltd. reported in 2011 (264) E.L.T. 313 and Tribunal in that case allowed the exemption under Notification 6/2006, dated 1-3-2006 to the assessee. Reference can be made to another decision of the Tribunal in the case of Om Metals SPML JV Unit 2 vs. CCE, Jaipur as reported in [2013 (298) ELT 79 (Tri-Del))]. 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.
(Pronounced in the open court on 23/6/16)
( Archana Wadhwa ) Member(Judicial)
( V Padmanabhan)
Member(Technical)
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