The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that duty exemption under notification no.No.12/2012-CE also applicable to sub-contractors who have not directly participated in the ICB.
Inar Profiles Pvt Ltd, the appellants are manufacturers of GI cable trays, accessories and their supports falling under Central Excise Tariff sub-heading No. 73089090. The appellants cleared excisable goods after obtaining purchase orders from various customers like M/s Siemens Ltd, M/s TRF Ltd. Jamshedpur, and M/s Macauber Beekay Pvt Ltd. New Delhi, which was awarded the contract for the supply of goods to power projects under “International Competitive Bidding” (ICB) has certificates issued by the Secretary of Govt. of India, Ministry of Power pertaining to various projects.
The appellant’s name appeared as a sub-contractor and certificates issued by the project authority clearly indicated the appellants as a sub-contractor along with a description and quantity to be supplied. Appellants gave clarification to the Supdt. Central Excise, Anakapalle Range they have supplied galvanized cable trays, etc., under ICB to various power projects through different customer/ contractors, at nil rate of duty as per Notification No.6/2006-CE dt.01.03.2006 vide Sr.No.91 and No.12/2012-CE dt.17.03.2012 vide Sr.No.336.
The appellants were regularly filing ER-1 Returns and had disclosed such clearance at nil rate of duty under the Notification No.06/2006-CE dt.01.03.2006 read with Notification No.12/2012CE. The revenue viewed that the appellant/ assessee has not participated directly in the ICB and demanded Central Excise duty with interest and penalty.
The appellants contended that there was no condition of requirement of End Use Certificates as per the notifications and it was clarified that exemption under Notification No.12/2012-CE was available to a subcontractor who supplied the goods to the main contractor who has been awarded contract/ work order under ICB.
In the case of CST Ltd vs CC & CE, it was held that “there was absolutely no need that the appellant (sub-contractor) themselves should have been the bidder in ICB. In huge projects, the main contractor does not do everything. There is also a system of sub-contractors inasmuch as the assessee had supplied the goods to BHEL who are the bidders in ICB, the condition of notification is satisfied and there is no justification for denying the benefit of the exemption notification.”
A Coram of Mr Anil Choudhary, member(judicial) Mr P V Subba Rao member (technical) observed that the Joint Secretary, TRU-1 have also issued clarification dt.10.07.2014, clarifying that the exemption is available also to sub-contractors who have not directly participated in the ICB. The Tribunal while allowing the appeal, has set aside the impugned order.
Shri V.M. Doiphode, Advocate appeared for the Appellant and Shri S. Hanuma Prasad appeared for the Respondent.
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