The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the goods supplied to mega power projects based on International competitive bidding are eligible for excise duty exemption.
Vrinda Engineers Pvt. Ltd, the respondent assessee as a sub-contractor availed the benefit of Notification 06/2006 supplied goods to Koderma Thermal Power Project Stage – I, for the supply of technological structure of M/s DVC, a Govt. of India Enterprise for Barh Super Thermal Power Project, a mega power project, without payment of duty.
The revenue appealed against the order passed by the adjudicating authority for allowing the exemption provided under Notification 06/2006 and dropped the proceedings against the assessee.
N. K. Chowdhury, the counsel for the assessee contended that all goods supplied against international competitive bidding falling under any Chapter of the First Schedule to Central Excise Tariff are rated ‘Nil’, subject to satisfaction of condition no.19, which stated that the exemption would be available if the goods were exempted from duties of customs leviable when imported into India.
S. S. Chattopadhyay, the counsel for the department contended that the assessee had failed to produce any evidence to the effect that the goods were exempted from duties of Customs and Additional Duties of Customs when imported into India.
Also submitted that the goods supplied by the respondent Viz. components/parts/accessories to the coal handling plant for the Barh Super Thermal Power Project, were not eligible to be classified under Chapter Heading 98.01 of the Customs tariff which attracts a ‘Nil’ rate of duty along with Additional Customs Duty.
The Bench observed that as per Entry 91 read with condition no.19 of Notification 06/2006 -CE dated 01.03.2006 and Entry No. 400 read with condition no. 86 of Notification 21/2002-Cus dated 01.02.2002, all goods supplied against international competitive bidding falling under any Chapter of the First Schedule to Central Excise Tariff are rated ‘Nil’, subject to satisfaction of condition no.19, which states that the exemption would be available if the goods were exempted from duties of customs leviable when imported into India.
The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) upheld the impugned order passed by the adjudication authority and rejected the appeal filed by the department.
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