Custom, Excise & Service Tax Tribunal
Crompton Greaves Ltd vs Commissioner Of Central Excise, ... on 2 August, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL Nos. E/1318 to 1323/12, E/1396 to 1400/11-Mum (Arising out of Orders-in-Original No. 1-2/Commr/M-III/PKA/2012-13 dated 25.5.2012 and No. 09/ANS/2011-12 dated 22.6.2011 passed by Commissioner of Central Excise, Mumbai-III) For approval and signature: Honble Mr. S.S. Kang, Vice President Honble Mr. P.K. Jain, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
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1. Crompton Greaves Ltd. Appellants
2. T. Sar
3. Swapna Deshmukh
4. V. Narayanan
5. Rajesh Mandale
6. A.R. Korgaonkar
7. Crompton Greaves Ltd.
8. Rajesh Mandale
9. A.R. Korgaonkar
10. V. Narayanan
11. T. Sar Vs. Commissioner of Central Excise, Mumbai-III Respondent Appearance:
Shri J.F. Pochkhanawala, Sr. Advocate, with Shri Aditya Chitale, Advocate, for appellants Shri Shobha Ram, Commissioner (AR), for respondent CORAM:
Honble Mr. S.S. Kang, Vice President Honble Mr. P.K. Jain, Member (Technical) Date of Hearing: 1.8.2013 Date of Decision: 1.8.2013 ORDER NO Per: P.K. Jain Two appeals have been filed by the main appellant, i.e. M/s. Crompton Greaves Ltd., against confirmation of duty, interest and imposition of penalty while nine other appeals have been filed against imposition of penalties.
2. The brief facts of the case are that the main appellant is a manufacturer of transformers and they have supplied the transformers to M/s. Jindal Power Ltd. M/s. Jindal Power Ltd. was setting up a mega power project at Tamnar (Raigarh). The goods were cleared under Central Excise Notification No. 6/2006 dated 1.3.2006 serial No.91 read with condition No.19. Two show cause notices have been issued to the appellants on the ground that the Project Authority Certificate has been issued under clause 8.2(g) of Chapter 8 of the Foreign Trade Policy and not under clause 8.2(f) of the said Chapter/Policy. In view of this position, they are not entitled for duty-free clearance under Notification 6/2006-CE dated 1.3.2006.
3. Heard both sides.
4. We find that the relevant portion in the Notification 6/2006-CE dated 1.3.2006 reads as under:-
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the excisable goods of the description specified in column (3) of the Table given below read with the relevant List appended hereto, as the case may be, and falling within the Chapter, heading or subheading or tariff item of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the Central Excise Tariff Act), as are given in the corresponding entry in column (2) of the said Table, from so much of the duty of excise specified thereon under the First Schedule to the Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table and subject to the relevant conditions specified in the Annexure to this notification, and condition number of which is referred to in the corresponding entry in column (5) of the Table aforesaid:
Provided that nothing contained in this notification shall apply to goods specified against S. No. 10 of the said Table on or after the 1st day of May 2007.
Explanation For the purposes of this notification, the rates specified in columns (4) of the said Table are ad valorem rates, unless otherwise specified.
TABLE S.No. Chapter or heading or subheading or tariff item of the First Schedule Description of excisable goods Rate Condition No. (1) (2) (3) (4) (5) .
.
..
.91
Any Chapter All goods supplied against International Competitive Bidding Nil 19
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. It would be seen from the above Notification that to get the benefit of the same, the goods have to be exempted from 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. The corresponding Notification under which the said goods are exempt is Notification No.21/2006-Cus. dated 28.2.2006 at serial No.400. The relevant entry of the said Notification reads as under:-
400 9801Goods required setting up of any Mega Power Project, so certified by an officer not below the rank of a Joint Secretary to the Government of India in the Ministry of Power, that is to say
(a) an inter-state thermal power plant of a capacity of 700 MW or more, located in the States of Jammu and Kashmir, Sikkim, Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland and Tripura; or
(b) an inter-state thermal power plant of a capacity of 1000 MW or more, located in States other than those specified in clause (a) above; or
(c) an inter-state hydel power plant of a capacity of 350 MW or more, located in the States of Jammu and Kashmir, Sikkim, Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland and Tripura; or
(d) an inter-state hydel power plant of a capacity of 500 MW or more, located in States other than those specified in clause (c) above.
Nil Nil 86 The customs duty exemption is available 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 privatise 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.
5. We find that in the present case there is no dispute that the goods are required for setting up of a mega power project and a certificate to that effect has been issued by the Joint Secretary to the Government of India in the Ministry of Power. Further, the certificate has also been issued to the effect that the power purchasing State has constituted the Regulatory Commission with full powers to fix tariffs and the power purchasing State undertakes, in principle, to privatize distribution in all cities in the State, each of which has a population of more than one million, within a period to be fixed by the Ministry of Power. The other certificate that is required in this case is covered by clause (c) of condition 86. As per the said clause, the Chief Executive Officer of such project has to certify the quantity, total value, description and specifications of the goods. It is in respect of this certificate that the Revenue is objecting. We have gone through the order-in-original. We find that the appellants have produced certificates to that effect from Shri Rajeev Jain, Senior Manager of the Project Authority. The relevant portion of the certificate is as under:-
It is certified that:
(a) to (d) .. ..
(e) The supply of the goods under the contract to be made to the power project in India is under the procedure of International Competitive bidding in accordance with the provisions of paragraph 8.2(g) and 8.4.4(iv) of the Policy 2004-09 and that the import content of the order is Rs.10,61,43,150.00.
(f) to (j) . .
2.* It is further certified that the contract No. JPL/4x250MW/DIST-TRANS/VJ/001 dated 19.05.2005 in respect of power transformer package for O.P. Jindal Raigarh Super Thermal Power Project has been awarded to M/s. Crompton Greaves Limited as the Indian Main Contractor. *Relevant only for contract at Paragraph 1(a), (b), (c), (d), (e), (f), (g) and (h) for which Annexure-I to Appendix-27 be furnished.
3. ..
It would be seen from the above certificate that at serial No.2, the certificate required as in clause (c) above mentioned, is covered. The portion mentioned at serial No.1 is not relevant for availing the benefit of Notification 6/2006-CE read with Customs Notification 21/2006. We are of the view that whatever has been stated at serial No.1 of the certificate is not relevant for granting the benefit of Exemption Notification and is relevant only for the purpose of Foreign Trade Policy.
6. We have also gone through clause 8.2(g) of Chapter 8 of the Foreign Trade Policy. We find that Chapter 8 of the Foreign Trade Policy deals with deemed export. Clause 8.2 lists out the categories of supply which will be considered as deemed export for the purpose of Foreign Trade Policy. The relevant part of clause 8.2 reads as under:-
8.2 Following categories of supply of goods by main / sub-contractors shall be regarded as Deemed Exports under FTP, provided goods are manufactured in India:
.
.
(f) Supply of goods to any project or purpose in respect of which the MoF, by a notification, permits import of such goods at zero customs duty;
(g) Supply of goods to power projects and refineries not covered in (f) above. A bare reading of the above clause (f) would indicate that supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits import of such goods at zero percent duty, is given the benefit of deemed export. Further, clause (g) states that the supply of goods to power projects and refineries even if not covered by clause (f) above will get the deemed export benefit. We are, therefore, of the view that clause (e) or clause (g) is relevant for granting the deemed export benefit and has no relevance whatsoever for granting exemption under Notification 6/2006-CE.
7. In view of the above position, we hold that the benefit of the Exemption Notification has been correctly availed and the appeals relating to demand of duty are set aside. Since we have set aside the demand of duty, the interest and penalties on all the notices do not survive. In the result, all the appeals are allowed. (Operative part pronounced in Court) (S.S. Kang) Vice President (P.K. Jain) Member (Technical) tvu 1 2