Rajasthan High Court - Jaipur
Commissioner Of Central Excise ... vs M/S Rallison Electricals Pvt Ltd on 27 July, 2017
Bench: K.S.Jhaveri, Inderjeet Singh
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT
JAIPUR
D.B. Central/Excise Appeal No. 25 / 2017
Commissioner of Central Excise and Service Tax, A Block, Surya
Nagar, Alwar- 301001
----Appellant
Versus
M/s. Rallison Electricals Pvt. Ltd. (Formerly Known As M/s Rollex
Electro Products Pvt. Ltd.), B-495, (C) Industrial Area, Bhiwadi
----Respondent
_____________________________________________________ For Appellant(s) : Mr. Anuroop Singhi with Mr. Aditya Vijay For Respondent(s) : Mr. Priyesh Kasliwal for Mr. P.K. Kasliwal _____________________________________________________ HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Order 27/07/2017
1. By way of this appeal, the appellant has assailed the judgment and order of the Tribunal whereby the Tribunal has allowed the appeal preferred by the assessee.
2. Counsel for the appellant has framed the following question of law:
"i) Whether the Tribunal was justified in reversing the order in original and holding that the assessee is entitled to claim exemption under Notification NO. 06/206-CE dated 01/03/2006 on electric wires and cables, despite non-fulfillment of the conditions enumerated therein and deleting the Central Excise Duty of Rs. 60,68,208/- alongwith interest?
ii) Whether the Tribunal was justified in holding that electric wires and cables falls under the heading 98.01 of Custom Tariff Act, 1975 and (2 of 5) [EXCIA-25/2017] thus entitled for exemption under Notification No. 06/2006-CE dated 01/03/2006?"
3. Counsel for the appellant contended that the Tribunal has seriously committed an error in reversing the finding given by the appellate authority namely Commissioner Customs wherein in para 12.10 reads as under:-
"12.10. In view of the above provision, only those goods will be classified under heading No. 98.01 of the Customs Tariff Act for which a contract has been registered with the proper Customs Authority as a project import under the said Regulation before clearance of goods from the factory. If any goods imported though may be similar to the goods for which contract is registered but if the goods are over and above the quantities specified in registered contract, shall not qualify to be classified under heading No.98.01 ibid. Further even if at the time of import and clearance, the goods were classified under heading No.98.01 but if the same are not used in the project, shall not be classified under 98.01 at the time of re-conciliation of the goods utilized in the project after the project is complete. The importer executes a bond for assessment of goods provisionally under heading No.98.01 and in the event any part of the goods is not found to have been used in the project the said goods shall not be classified under 98.01 and shall be classified under appropriated tariff heading relevant to that goods for the purpose of levy of duty."
4. The Tribunal while considering the matter observed as under:-
"7.2. Further, the Commissioner in the impugned order says that the subject goods are not classifiable in Chapter heading 9801 of Customs Tariff. But from the wordings of Chapter 9801, we find that all the items of machinery as well as all components or raw materials for manufacture of the machinery and their components, required for initial setting up of a unit etc. of specified Power Project (alongwith other plants/projects) are classified in Chapter Heading 98.01 of Customs Tariff. Therefore, (3 of 5) [EXCIA-25/2017] there cannot be any dispute on subject items, 'Electric Wires & Cables' as the facts stand are classifiable under Chapter Heading 98.01 of Customs Tariff and as per the discussion made above would be entitled to the benefit of exemption Notification No. 6/2006-CE dated 01.03.2006."
5. He has also contended in view of the observations made in para 9.08 and 9.09 of the Commissioner Customs which reads as under:-
"9.08. That they invited attention to Letter F. No. 463/5/2007-Cus. V dated 17.09.2007 issued by the CBEC to solve the controversy and the similar circumstances.
Projects financed by World Bank, etc.- Customs duty Exemption Certificate by Member (Finance) instead of Chairman, NHAI Subject: Delegation of power in respect of National Highways Authority of India (NHAI) to sign the Customs! Central Excise Exemption Certificate for projects financed by the World Bank, ADB or other international agency-Reg.
National Highways Authority of India (NHAI) had represented to the Central Board of Excise and Customs (CBEC) that in respect of a number of contracts/projects financed by the World Bank, the Asian Development Bank or any other specified international organization and approved by the Government, NHAI is the executing authority. In terms of the notification NO. 84/97 Customs dated 11.11.97, in order to claim the exemption from customs duties for the goods imported into India for use in such projects, NHAI issues Customs Duty Exemption Certificate (CDEC). NHAI requires more than 700 certificates to be issued every year by the Chairman, NHAI, as 'executive head'. In this regard NHAI had requested for delegation of power to issue certificate for the purpose of such customs duty exemption certificates to Member, NHAI in place of Chairman, NHAI.
2.Board examined the issue of delegation of power to issue CDEC for the purpose of customs duty exemption under Notification No. 84/97-Customs dated 11.11.97. the said notification provides that the importer claiming duty exemption shall produce a certificate issued by the 'Executive Head' of the 'Project Implementing Authority' and counter- signed by an officer not below the rank of Joint (4 of 5) [EXCIA-25/2017] Secretary in the concerned line Ministry Board noted that the issue of CDEC is a time consuming exercise, and Board of NHAI has recently decided to delegate the power vested in the Chairman, NHAI as 'executive head' to the Member (Finance) NHAI.
3.Accordingly, Board has decided that henceforth in respect of notification No. 84/97-Customs dated 11.11.97, for NHAI, the exemption in the aforesaid notification shall be extended by the Customs field formations on the basis of CDEC issued by the Member (Finance), NHAI.
9.09. Notification 84/97- Cus dated 11.11.97 provides certain exemption from custom duty for the goods imported into India, if the goods were used in the project finance by the World Bank. This exemption is available to the importer if a certificate is issued by the Chairman of NHAI. NHAI is a Govt. Undertaking like NTPC in present case. Similar to present case it was not possible for NHAI to issue thousands of certificates signed by the chairman because if the chairman is signing the certificate for procurement of material he will do nothing except certification. A representation made by NHAI before CBEC to clarify the matter and as a result Letter F. No. 463/5/2007 -Cus. V, dated 17.9.2007 is issued by the CBEC."
6. Counsel for the respondent contended that the certificate was issued by the authority which was not competent therefore, he is eligible for exemption.
7. We have heard counsel for both the sides.
8. The Tribunal while considering the first issue has observed in para 7.2 which we have reproduced above, we are in complete agreement with the view taken by the Tribunal. Even otherwise 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. Similarly, the tribunal has observed as under:-
(5 of 5) [EXCIA-25/2017] "7.1. The facts are that the appellant has supplied the goods against International Competitive Bidding (reference to Sr. No. 91 of Notification No. 6/2006-CE (supra) for setting up a Mega Power project of a capacity of 1000 MW or more (refer Sr. No. 400 of Notification No. 21/2002-Cus. dated 01.03.2002) and certified so through a Project Authority Certificate (PAC) dated 09.09.2005 by the Additional General Manager of NTPC, Ms. Reeta Bandopadhyay, who is duly authorised to issue such a certificate."
9. 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.
10. In view of the above, the issues are answered in favour of the assessee against the department.
The appeal stands dismissed.
(INDERJEET SINGH)J. (K.S.JHAVERI)J. A.Sharma/56