2023 (6) TMI 1107 - AT - Central Excise

Clandestine Removal - Supply of goods against ICB - sub-contractor of the main contractor for a power project awarded by M/s. Cairn Energy India Pty. Ltd. under International Competitive Bidding - Denial of benefit of N/N. 6/2006 CE dated 1.3.2006 on the ground that the Project Authority Certificate (PAC) was issued by M/s. Cairn Energy India Pvt. Ltd. to the IGP unit situated at Kottivakkam and not to the appellant unit which is situated at Sembakkam - HELD THAT - The gaskets under the above invoice have been cleared to M/s. Cairn Energy India Pty. Ltd. A/c L T Ltd Northern Area Development Project Rajasthan as mentioned in purchase order dated 25.3.2009 issued by L T. We also find that the LOI and PO were addressed to IGP s HO it was only the PAC which mentioned the unit situated at Kottivakkam. The said PAC has subsequently been amended to rectify and the reflect the actual clearances made to the same project. Annexure I to the split PAC s Nos. 188 189 certified by the main contractor also mentions the LOI/PO number and date. When the goods have been found to have been cleared towards the power project under International Competitive Bidding which was eligible for duty exemption the LOI and PO for the supply were addressed to IGP s HO and there is no allegation of clandestine clearance etc duty exemption benefit cannot be denied merely because the initial PAC was in the name of Kottivakkam unit and not in the name of Sembakkam unit on the date of clearance when the PAC was also rectified later. The appellant is eligible for availing exemption from duty under Notification No. 6/2006 CE dated 1.3.2006 for the impugned goods. This being so demand for interest and penalty do not survive - Appeal allowed.

Summary

Issues involved:
The issues involved in this case are related to the denial of exemption from duties under Notification No. 6/2006 CE, issuance of Project Authority Certificate (PAC) to a different unit, and the subsequent rectification of the PAC.

Denial of Exemption:
The appellant, a sub-contractor for a power project, cleared gaskets claiming exemption under Notification No. 6/2006 CE. The dispute arose as the PAC was issued to a unit different from where the goods were cleared. The authorities held the exemption claim erroneous and demanded duty, interest, and penalty. The Commissioner (Appeals) upheld the decision, stating that without PAC prior to clearance, the goods were not eligible for exemption. The appellant contended that despite the initial PAC discrepancy, the goods were supplied for the same project, and the subsequent rectification of the PAC validated the exemption claim.

Rectification of PAC:
The appellant's counsel argued that operational convenience led to the clearance of gaskets from a different unit than mentioned in the PAC. The appellant later amended the PAC to reflect the actual clearances made. The Tribunal found that the supplies were made for the same project under International Competitive Bidding, and the LOI and PO were addressed to the appellant's head office. The split PACs issued later certified the quantities cleared by both units towards the same project, demonstrating compliance with the duty exemption requirements.

Decision:
After considering the arguments, the Tribunal concluded that the appellant was eligible for duty exemption under Notification No. 6/2006 CE for the cleared goods. As the goods were supplied for the specified project, addressed in the LOI and PO, and there were no allegations of misconduct, the benefit of duty exemption could not be denied based solely on the initial PAC discrepancy. The impugned order was set aside, and the appeal was allowed, with relief granted as per law.