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2015 (6) TMI 657 - CESTAT NEW DELHI

2015 (6) TMI 657 - CESTAT NEW DELHI - 2015 (329) E.L.T. 595 (Tri. - Del.) - Goods meant for Mega power project / Independent power project - international competitive bidding (ICB) - Denial of exemption under Notification No.6/06-CE dated 01.03.2006 and Notification No.6/2002-CE dated 01.03.2002 - Held that:- Joint Secretary in the Ministry of Power in the certificate issued by him in respect of power project, in question, has certified that the power project is interstate Thermal Power Project .....

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/02-Cus. for full customs duty exemption is not applicable and for this reason, the condition cannot be satisfied, its fulfilment cannot be insisted in accordance with the principle of lex non cogit ad impossiblia which is applicable to the tax matters also. We, therefore, hold that the denial of exemption under Notification No.6/02 -CE and 6/06-CE on the ground that the goods imported would not be eligible for customs duty exemption under Notification No.21/03-Cus. is not correct. - decided in .....

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account of M/s Jindal Power against International Competitive bidding at nil rate of duty under Notification No.6/02-CE dated 01.03.2002 (Sl.No.301). The goods supplied by the appellant by availing of full duty exemption under this Notification were meant to be used for setting of 1000 Mega Watt thermal power plant by L & T for M/s. Jindal Power. Notification No.6/2002-CE dated 01.03.2002 (Sl.No.301) and its successor Notification No.6/06-CE dated 01.03.2006 (Sl.No.91) prescribes nil rate o .....

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ion No.21/2002-Cus. (Sl.No.400) exempted "the goods required for setting up of any mega power projects, that is to say- (a) "An interstate thermal power plant of capacity of 1,000 M.W or more; or (b) An interstate Hydel power plant of capacity of 500 M.W. or more, as certified by an officer not below the rank of Joint Secretary to the Government of India in the Ministry of Power." This customs exemption was subject to the following conditions:- "if an officer not below the ra .....

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te's share of central plan allocations and other devolutions towards discharge of any outstanding payment in respect of purchase of power." 1.2. In the present case, there is no dispute that the goods were supplied by the appellant against international competitive bidding to M/s. L & T Ltd. on account of M/s. Jindal Power Ltd. and that the appellant have also produced certificate from Joint Secretary, the Ministry of Power certifying that- "(a) that Raigar Thermal Power Projec .....

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ovide recourse to that state's share of central plan allocations and other devolutions towards discharge of any outstanding payment in respect of purchase of power, the Joint Secretary of the Ministry of Power under his letter dated 17.08.2005 clarified that this condition is not applicable in case of independent power projects and the power projects, in question, is an independent power project. 1.3. The Department was of the view that since the Joint Secretary to the Government of India th .....

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xemption would also not be admissible. It is on this basis that the Commissioner by the impugned order-in-original dated 27.11.2006 confirmed the duty demand of ₹ 11,08,21,021/-alongwith interest on it under section 11AB and besides this, has imposed penalty of ₹ 1.25 Crores on the appellant under Rule 25 of the Central Excise Rules 2002. Against this order of the Commissioner this appeal has been filed. 4. Heard both the sides. 5. Shri Anurag Kapoor and Shri B.L. Narasimhan, Advocat .....

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er to fix tariff and that the state has undertaken in principle, to privatize distribution in all cities in that state which have population of more than one Million, that with regard to the third condition of the condition No. 86 of the Notification No. 21/2002-Cus the Joint Secretary has clarified that this condition regarding the power purchasing state having agreed to provide the recourse to that state's share of central plan allocation and other devolutions towards discharge of any outs .....

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conditions, the conditions applicable for customs duty exemption in respect of imported goods cannot be applied for central excise duty exemption and in this regard he relies upon the judgment of the Tribunal in the case of Kent Introl Pvt.Ltd. vs. CCE, Nashik reported in 2014 (301) ELT 84 (Tri-Mum.), that in any case, when certain condition: prescribed in the customs exemption notification is not applicable, the fulfilling of that condition cannot be insisted, in accordance with the principles .....

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hat the impugned order is not correct. 6. Shri M.S. Negi, the ld. DR, defended the impugned order by reiterating the findings of the Commissioner and pleaded that the excise duty exemption under Notification No.6/02CE & 6/06-CE in respect of the goods supplied against International Competitive Bidding is applicable subject to condition that the same goods, if imported into India, are fully exempt from basic customs duty and additional customs duty, that the exemption in respect of the goods, .....

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er devoluations towards discharge of any outstanding payment in respect of purchase of power, and instead the Joint Secretary has clarified that this condition is not applicable, this condition has to be treated as not fulfilled and hence the goods, in question, if imported into India would not be eligible for customs duty exemption and hence the excise duty exemption under Notification No.6/2002-CE and 6/06-CE would also not be admissible. He emphasised that it is well settled law that the duty .....

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therefore, pleaded there is no infirmity in the impugned order. 7. We have considered the submissions from both the sides and perused the records. The goods supplied by the appellant during the period from July, 2005 to May, 2006 - iron and steel items are made for use in Mega Power Project of M/s. Jindal Power Ltd. which is being setup by M/s. Larson & Tubro Ltd, There is no dispute that the power project - Raigar Thermal Power project for which the goods have been supplied is an inter stat .....

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t the same goods, if imported into India, would be fully exempt from basic Custom duty and additional customs duty. Sl. No.400 of the exemption Notification No. 21/2002-Cus exempts the goods imported which are required for setting-up of any mega power project, that is to say interstate thermal power plant of capacity of 1000 mega power or inter state Hydel Plant of capacity of 500 mega Watt or more, as certified by Joint Secretary in the Ministry of Power the whole of the basic customs duty and .....

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than one Million within a period to be fixed by Ministry of Power, and the power purchasing state has agreed to provide recourse to that state's share of Central plant allocation and other devolutions towards discharge of any outstanding payment in respect of purchase of power. 8. In the present case the concerned Joint Secretary in the Ministry of Power in the certificate issued by him in respect of power project, in question, has certified that the power project is interstate Thermal Power .....

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