Whether exemption admissible for fabrication structures supplied to Mega Power Project?

PJ/CASE LAW/2016-17/3157

Case:-ATMASCO (P) LTD. VERSUS COMMISSIONER OF C. EX. & CUS., RAIPUR

Citation:- 2016 (334) E.L.T. 122 (Tri. - Del.)

Brief Facts:-The appellant have manufactured various boiler parts and cleared the same to Mega Power Project, by claiming exemption in terms of Notification No. 12/2012-C.E., which grants exemption to various projects supplied to a Mega Power Project. The appellant have also produced the certificate from the proper authorities, as required in terms of the conditions of the notification and there is no dispute about the same.
However, the only objection of the Revenue is that the parts manufactured by the appellant are general fabrication structures, which are not specified in the notification in question, either as parts or components of any machinery. As such, the benefit of the notification stands denied to them resulting in confirmation of duty of Rs. 1,40,79,364/- along with confirmation of interest and imposition of penalty of Rs. 70,39,682/-.

Reasoning of Judgment:-After hearing both the sides, we find that the parts of boiler, being manufactured by the appellants, were Audo Weld, Beams, Bunker, Columns and Boxes, etc., which the Commissioner has held to be the General Structures, not specified in the notification and an identical question was considered by the Tribunal in the case of Ganges International Pvt. Ltd.v. CCE, Raipur - 2014 (308) E.L.T. 106 (Tribunal-Delhi), which stands held by the Tribunal as under:
“As regards, the goods supplied to Prayagraj Super Thermal Mega Power Project, there is no dispute that the project is a mega power project awarded to a developer through tariff based competitive bidding and the appellant have claimed exemption in terms of Sl. No. 91B of Notification No. 6/2006-C.E. and Sl. No. 338 of Notification No. 12/2012-C.E. The Commissioner has given finding that the requisite conditions for this exemption are satisfied inasmuch as a certificate by an officer not below in the rank of Chief Engineer certifying that the said goods are meant for setting up of said mega power project and also an undertaking from Chief Executive officer of the project to the Deputy/Assistant Commissioner, that the goods would be used only in the said mega power project and in the event of non-compliance of this exemption, the duty would be payable by the project developer have been produced. However, here the objection of the Commissioner is that the goods supplied - General Fabrication Structures and Auto Welded Beams and Boxes, are not covered by the description of the goods mentioned against Sl. No. 91B of the Notification No. 6/2006-C.E. and Sl. No. 338 of the Notification No. 12/2012-C.E., as the Commissioner is of the view that “these goods are generally used for making shades and supporting structures for capital goods”. In our view, even if the General Fabrication Structures, Auto Welded Beams and Boxes cleared by the appellant are meant to be used as Supporting Structure for some machinery, the same would have to be treated as component parts of that machinery as the description of goods against Sl. No. 91B of Notification No. 6/2006-C.E., Sl. No. 338 of Notification No. 12/2012-C.E. covers all components whether finished or not and raw materials for the manufacture of the items of machinery, prime movers, instruments, apparatus, appliances, control gear, transmission equipments etc. In view of this, the impugned order denying exemption to the goods supplied to Prayagraj Super Thermal Mega Power Project is also not sustainable.”
We find that the notifications in question are identical to the items being manufactured by M/s. Ganges International Pvt. Ltd. and the notification is also the same. In fact, the reasonings for denial of benefit of the notification in question, by the adjudicating authority, is also identical to the objections raised by the Revenue in the case of Ganges International (supra). As such, following the above decision of the Tribunal, laying down that even if the general fabrication structures are being used as supporting structures for some machineries, the same are required to be treated as components parts of that machinery and the benefit in Sl. No.338 of the Notification No. 12/2012-C.E. would be available inasmuch as the same covers all the components whether finished or not. By following the said decision, we set aside the impugned order and allow the appeal with consequential relief to the appellant. Stay petition as also appeal gets disposed of in above manner.

Decision:- Appeal allowed.

Comment:- The crux of the case is that as per decision of case Ganges International (supra), laying down that even if the general fabrication structures are being used as supporting structures for some machinery, assessee can claim benefit of Notification No. 12/2012-C.E. Therefore, the exemption notification covers all components whether finished or not for the manufacture of the items of machinery, prime movers, instruments, apparatus, appliances, control gear, transmission equipments and the benefit of exemption was available to the assessee.

Prepared by: Mahesh Parmar

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PJ/CASE LAW/2016-17/3157

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