Customs, Excise and Gold Tribunal - Mumbai
Zuari Agro Chemicals Ltd. vs Commissioner Of Central Excise And ... on 9 November, 2001
JUDGMENT
Gowri Shankar, Member (Technical)
1. The question for consideration in this appal is the eligibility to exemption under entry 226 of the Table to notification 11/97 to the diesel generating set that the appellant imported. The appellant's claim that these goods are classifiable under Heading 98.01 of the tariff is not in dispute. The exemption contained in entry 226 of the notification reads as follows:
"Goods required for-
(i) fertiliser projects;
(ii) coal mining projects;
(iii) captive power plant of 5MW or more;
(iv) power generation projects including gas turbine power projects (excluding captive power plants set up by projects engaged in activities other than in power generation);
(v) power transmission projects of 66 KV and above;
(vi) other industrial plant or projects."
2. The question to be considered is, whether the goods are entitled to exemption under entry (i) at nil rate of duty, as goods required for a fertiliser project, or under entry (iii) at 20% basic duty and 13% additional duty of Customs as captive power plant of 5MW or more. In the impugned order, the Commissioner held that the generator will be part of a power plant that the appellant proposed to set up which will produce power required for the NPK plant which is a fertiliser project. He has therefore concluded that the two are independent projects and the goods must be required for captive power plant.
3. The contentions of the counsel for the appellant are these. The exemption contained in each of serial numbers of entry 226 are separate exemptions. The Tribunal has in held in its judgment in Jay Ambe Plastex Industries v. CCE 1999 (113) ELT 297 that where goods are entitled to simultaneously more than one exemptions, it is the option of the importer to elect of the one that benefits it most. Therefore, the appellant is entitled to the exemption contained in serial 1 in preference to that contained in serial 3. He contends alternatively that the statutes has been amended for purpose of economic growth development. Therefore it should be liberally construed, relying for this purpose of the judgment of the Supreme Court in Bajaj Tempo Ltd v. Commissioner of Income Tax (1992) 3 SCC 78. He further contends that since the power plant is to be used in the NPK project, it is a part and parcel of the fertiliser plant and therefore the exemption under entry one should be available. He draws our attention to the passages in the book "Principles of Statutory Interpretation by G.P. Singh, to emphasise that selecting of different interpretation the Court must have that reasonable and sensible rather than that which is none of these things.
4. The department representative emphasises what the Commissioner says in his order.
5. The Commissioner has noted the contents of a letter 528/67/97-Cus dated 18.11.1999 of the Ministry of Finance to the Secretary, Department of Fertiliser. This letter refers to a clarification issued to the Department of Fertiliser by the ministry on "captive power plant imported along with a fertiliser plant will be liable to duty as applicable to captive power plant and not the duty as applicable to fertiliser plant. The Commissioner has, and in our view, rightly held himself bound by the contents of this letter in the light of the Supreme Court's judgment in Ranade Micronutrients v. CCE 1996 (82) ELT 19.
6. No doubt, this letter is not binding upon us. However, it is clear from this letter that the rate of duty provided for captive power plant from that provided to fertiliser plant is deliberate. Therefore, the question of so interpreting the notification as to apply the exemption available in sub entry (i) with a view to advancing economic growth will not arise; nor can it be said that recognition of this fact there was an intention to provide a different rate of duty to the power plant also indicates that the two entries have to be construed separately and renders permissible an interpretation in which, although the power plant were to be used for it with a view to running fertiliser plant, it has to be considered separately.
7. The Commissioner in fact finds that the captive power plant is a plant distinct and separate from fertiliser plant. He quotes from the project report to say that in order to sustain increased production capacity of the fertiliser pant it has been decided to set up a 6 MW power plant along with steam generating unit. He refers elsewhere to costing a power plant being done separately under being a separate schedule for its erection and commissioning, separate from fertiliser plant. He notes that the appellant had obtained from the Chief Electrical Engineer, Government of Goa, permission for installing and running a power plant in accordance with the scheme of their government. His conclusion that the captive power plant and fertiliser plant are two different entities even though they may be used in conjunction with which appears to us to be sound. The power pant no doubt has been imported in order to provide power to the new NPK plant. However, the NPK plant would not be said to be incomplete without the power plant. It could be run by electricity from say general grid of the electricity board or purchase from elsewhere. Its functioning is not dependent on the power plant. Similarly both power plants may have been imported in order to provide power, to the fertiliser plant, its identity is not merged in that of the fertiliser plant. It could, at any point in future be decided that the power from this plant will be used not to run NPK plant, but to some other plant of the appellant. It could also be decided to sell this part to the electricity board for public distribution. The fact that NPK plant makes use of the power from the captive power plant or that the intention in importing a power plant were to provide supply of electricity does not make it an integral part of the fertiliser plant.
8. The conclusion of the Commissioner that the power plant is separate from fertiliser plant is not challenged before us.
9. We do not find the Commissioner's conclusion unreasonable. The wording and structure of the entries in the notification indicates that it is applicable to goods classifiable under Heading 90.28. Such goods, if imported for setting up a fertiliser project would get the benefit of entry 1, if it is imported for setting up coal mining project, it would get the benefit of entry (ii), if it is imported for captive power plant of 5MW or more, it would get the benefit of entry (iii). We are therefore not able to accept the contention that the power plant imported by the appellant would at one and the same time qualify for the exemption under both entry (i) and entry (iii). We therefore do not find any ground for interference with the Commissioner's order.
10. Appeal dismissed.