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TMI Blog2023 (5) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... of exempted goods. On the finding that such was the mandate devolving on the appellant herein that had not been complied with, Commissioner of Central Excise, Customs & Service Tax, Aurangabad directed recovery of Rs. 91,09,692 under rule 14 of CENVAT Credit Rules, 2004, along with applicable interest, and imposed penalty of Rs. 10,00,000 under rule 15 of CENVAT Credit Rules, 2004 in order [order-in-original no. 13/CEX/Commr/2011-CX dated 17th March 2011] impugned here. 2. The appellant is in the business of manufacturing goods such as 'current transformers', 'current voltage transformers', 'gas insulated switchgears', 'miniature circuit breakers' and other similar goods and which, between 7th July 2009 and 28th February 2010, had been cleared for the execution of 'ultra mega power project (UMPP)' at Mundhra, Gujarat that, in terms of notification no. 6/2006-CE dated 1st March 2006 (as amended from time to time), were exempted from duties of central excise upon obtaining of certificate dated 19th July 2007 issued by Additional Secretary to Government of India in Ministry of Power and undertaking dated 9th July 2009 of Chief Executive Officer (CEO), M/s Coastal Gujarat Power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) the provisions of sub- rules (1), (2), (3) and (4) shall not be applicable in case the excisable goods removed without payment of duty are either - (i) ....... (ii) ....... xxxxx (vii) all goods which are exempt from the duties of customs levy should under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under sub- section (1) of section 3 of the said Customs Tariff Act when imported into India and supplied against International Competitive Bidding in terms of notification No. 6/2002-Central Excise dated the 1st March, 2002 or Notification No. 6/2006-Central Excise, dated the 1st March, 2006 as the case may be.' of CENVAT Credit Rules, 2004 that, for ' xxxx (vii) all goods which are exempt from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under subsection (1) of section 3 of the said Customs Tariff Act when imported into India and are supplied, - (a) against International Competitive Bidding: or (b) to a power project from which power supply has been tied up to tariff-based competitive bidding; or (c) to a power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Central Excise, Nagpur [2015 (315) ELT 238 (Tri-Mumbai)] and in Siemens Ltd v. Commissioner of Central Excise, Navi Mumbai [2015 (321) ELT 493 (Tri-Mumbai)]. 7. It was also pointed out by Learned Counsel that the appeal had been taken up by the Tribunal for disposal on 27th September 2013 and that, after consideration of the preliminaries, it was observed that, for entitlement of the benefit of exemption, certificate from the contract awarding authority, i.e., Government of India in Ministry of Power, indicating capacity of the project, award of contract through 'international competitive bidding' procedure and procurement of power by tariff-based competitive bidding, should have been produced; the hearing was adjourned to 12th December 2013 in order [M/2068/13/EB/CII dated 27th September 2013] directing furnishing of such certificate. The appellant, referring to the letter dated 10th December 2008 of M/s PFC Consulting Ltd issued to M/s Coastal Gujarat Power Ltd certifying that the Mundhra Ultra Mega Power Project (UMPP) had been awarded to the latter through 'international competitive bidding' procedure and letter dated 19th July 2007 of Additional Secretary to Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y chapter to 'nil' rate of duty upon compliance with stipulation 'if the goods are exempted from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under Section 3 of the said Customs Tariff Act when imported into India.' in condition no. 19 therein which is also reflected in the exclusion to rule 6 of CENVAT Credit Rules, 2004. 10. By amending notification no. 46/2008-Central Excise dated 14th August 2008, an additional entry for exempting '91A. Goods required for setting up of an ultra mega power project based on super-critical coal-thermal technology, with installed capacity of 3960 MW or above, from which power procurement has been tied up through tariff-based competitive bidding' in any chapter subject to condition that '26 If,- (a) such goods are exempted from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under Section 3 of the said Customs Tariff Act when imported into India; (b) an officer not below the rank of Chief Engineer in the Central Electricity Authority certifies that the said goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, by 27th February 2010, three classes of 'exempted goods' were privileged with the immunisation from reversal mandated in rule 6 of CENVAT Credit Rules, 2004: those goods supplied to projects awarded through 'international competitive bidding' procedure, those goods supplied to 'ultra mega power projects (UMPP)' providing power through tariff-based competitive bidding subject to furnishing of certificate by Chief Engineer in Central Electricity Authority and undertaking by Chief Executive Officer of the project, and those goods supplied to 'mega power projects' providing energy through tariff-based competitive bidding, or awarded to a developer on the basis of such bidding, subject to furnishing of certificate by Joint Secretary to Government of India and undertaking by manufacturer of such goods. Not only were these three categories of destination of supplies separate and mutually exclusive but were increasingly specific in terms of the capacity of the project and varied in terms of the certification and undertaking to be furnished for eligibility to exemption. The latest of the incorporations is not relevant to the period of dispute except in the context of the finding in the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecific to power projects such as that of M/s Coastal Gujarat Power Ltd, had been inserted in notification no. 6/2006-Central Excise dated 1st March 2006 in addition to the existing serial no. 91 pertaining to award of project by 'international competitive bidding' procedure but that does not erase existing eligibility. 14. The condition appendant to serial no. 91 in notification no. 6/2006-Central Excise dated 1st March 2006 for all goods supplied against 'international competitive bidding' merely requires such eligibility of such goods to exemption if imported from abroad. There is no allegation that the said goods, if sourced from outside the country, was not eligible for exemption from duties of customs under corresponding notification pertaining to goods procured for projects awarded by 'international competitive bidding' process. It is also on record that the operator, M/s Coastal Gujarat Private Limited, a wholly-owned subsidiary of M/s Power Finance Corporation, an entity of the Government of India, had been awarded the project by 'international competitive bidding' procedure which should suffice for being eligible for the exemption on clearance of finished goods by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for their authorized operations inside a SEZ notified under subsection (1) of Section 4 of the Act, may be treated as in the nature of exports." 14. Therefore, it is clear, the said amendment has to be construed as retrospective in nature and the benefit of Rule 6(6)(i) as amended in 2008 has to be extended to the goods cleared to a "developer" of a Special Economic Zone for their authorized operations. Therefore, we do no see any merit in these appeals.' implying that the omission, and subsequent inclusion, of 'developer', while excluding supplies to 'unit' from the reversal of credit in books of supplier was clarificatory. 16. In re Modern Insulators Ltd, the Hon'ble High Court of Rajasthan had dismissed the claim of M/s Modern Insulators Ltd that the clearance of goods effected to the very same power project, and between May 2009 and June 2009, was covered in the subsequent incorporation by rule 6(5)(vii) of CENVAT Credit Rules, 2004 for not involving any substantial question of law requiring interference with the finding of the Tribunal that the amendment was prospective and, hence, not applicable for such supplies. It is seen that the same plea made before the Tribunal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Hon'ble High Court of Karnataka had not been placed for consideration on that occasion. However, the decision of the Tribunal distinguished the exposition on clarificatory inclusion in relation to supplies effected to developers in 'special economic zones' that had come up earlier before the Tribunal in SP Fabricators Pvt Ltd v. Commissioner of Central Excise, Belapur [2016 (334) ELT 105 (Tri-Mumbai)]. We are unable to place the said decision of the Tribunal in the contextual framework of the substantial question of law dealt with by the Hon'ble High Court of Karnataka in the absence of such plea by the appellant and, hence, we unable to determine if other question of law now posed by appellant before us requires response. Consequently, we leave that aspect of the submissions unattended with the precedent decision of the Tribunal, specifically holding that the inclusion in rule 6(5)(vii) of CENVAT Credit Rules, 2004 are effective prospectively, binding us. 17. However, the entitlement of the appellant to exemption at serial no. 91 of notification no. 6/2006-Central Excise dated 1st March, 2006 for which the Tribunal had directed production of evidence thereto and, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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