Page 164 - ELT_1st July 2020_Vol 373_Part 1

74 EXCISE LAW TIMES [ Vol. 373

bly and inherently fallacious. Under Central Excise Notification No. 6/2006-C.E.,
dated 1st March, 2006, Entry 91 exempts all goods supplied against ICB subject
to condition No. 19, which prescribes that the goods must be exempted from levy
of Customs under First Schedule to the Customs Tariff Act, 1975 as also the addi-
tional duty leviable under Section 3 of the Customs Tariff Act, 1975. Entry No. 91
along with the condition No. 19 is reproduced hereinbelow :

91 Any chapter All goods supplied against Inter- Nil 19
national Competitive Bidding
CONDITION
19 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.
13. It is thus clearly discernible by a plain reading of the aforesaid con-
ditions that in order to be entitled to exemption of excise duty, the goods are to
be necessarily exempted from customs duty as well. The supplies made to BHEL
Noida for 3x250 MW Power Project were not entitled to exemptions from cus-
toms duty and resultantly were not ab initio exempted for the excise duty. In rela-
tion to supplies made by petitioner to Fanco Infratech, Gurgaon for 2x507.5 MW
Power Project and BHEL Noida and BHEL Hyderabad for 2x750 MW Power Pro-
ject, the supplies are in relation to setting up of Mega Power Project. Even in such
cases, the imports would be exempted from the Customs duty only where the
requisite conditions, as provided in the aforesaid customs notification stand ful-
filled. This position is not factually disputed by the respondents. Para 8.2(f) of the
FTP covers supply of goods to any project or purpose in respect of which the
Ministry of Finance by a notification permits imports of such goods at zero cus-
toms duty. In contrast, para 8.2(g) of the FTP covers supplies of goods to power
projects and refineries which are not covered under para 8.2(f) of the FTP. Thus,
in effect para 8.2(g) applies to those cases where there is no notification for im-
port of goods at zero customs duty and effectively are not exempted. All the re-
fund claims of the petitioner, excluding the one noted at serial No. (iii) of para 3
of this order, are covered under the category of para 8.2(g) of the FTP and such
supplies were not entitled to exemption from customs duty. As a result, they do
not fulfill the prescribed condition No. 19 and are consequently not entitled to
excise exemption under Entry No. 91 of the excise notification. Further, for such
supplies, the project owners have clearly specified that the supplies made are
under para 8.2(g) of the FTP in the following terms :
“That supply of the goods under the contract to be made to power project
in India is under the procedure of International competitive bidding in ac-
cordance with the provisions of paragraph 8.2(g) and 8.4.4(iv) of the Policy,
2004-09 and that the import content of the order EURO 39,993,000/- (Euro
thirty Nine Million Nine Hundred Ninety Three Thousand Only).”
Thus, the petitioner could not have been entitled to any excise duty exemption
on the strength of PAC. The claim of Customs duty exemption or excise duty
exemption was impossible in view of the declaration made by the project owner
in the PAC. The respondents cannot categorize the said supplies to be ab initio
exempt from excise duty and apply the impugned circular. The presumption
drawn by the respondents to deny refund exhibits unconditional latitude which
is an erroneous understanding of the provisions of the FTP. Merely on the as-
sumption that since the supplies made is under ICB, they are not eligible for re-
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