Full Judgment
2. The matter relates to the eligibility of the goods for Captive Power Plant of M/s. Gujarat Heavy Chemicals Ltd. ('GHC' for short), under exemption Notification No. 71/85-Cus., dated 17-3-1985. The GHC were engaged in the manufacture of soda ash. For their energy requirements, they wanted to instal a Captive Power Plant. The Respondents - M/s.
Thermax Pvt. Ltd. has imported boilers and accessories for use in the Captive Power Plant of GHC. Under exemption Notification No.71/85-Cus., dated 17-3-1985, the goods falling under Heading No. 84.66 of the First Schedule of the Customs Tariff Act, 1975 (hereinafter referred as the Tariff) when imported for the Power Projects attracted nil rate of customs duty. The respondents had applied for registration of Contract under Heading No. 84.66 of the Tariff in terms of Notification No. 71 /85-Cus. aforesaid, as the goods for the Power Project. The Asstt. Collector of Customs, Bombay was of the view that the goods in question would not qualify for assessment as for Power Project, as the Soda Ash Plant of GHC was not a Power Project and that the exemption under Notification No. 71/85-Cus. was not available to the goods for the Captive Power Plant. On appeal, the Collector of Customs (Appeals), Bombay ordered the assessment of the imported boilers and accessories under Heading No. 84.66 of the Tariff in terms of Notification No. 71/85-Cus., dated 17-3-1985.
3. The matter was posted for hearing on 18-10-1995 when Shri Mohan Lal, JDR appeared for the appellants. Shri T.N. Rao, Advocate proxy to Shri Uday Kumar Sagar, Advocate requested for adjournment which was refused.
4. Shri Mohan Lal, JDR briefly narrated the facts and submitted that the Captive Power Plant of GHC was not a Power Project for the purposes of Notification No. 71/85-Cus. He referred to the Public Notice dated 19-11-1985 of the Customs House, Bombay to plead that the Captive Power Plant put up in a industrial plant did not merited classification as Power Project but were to be treated as part of the Project in which the said Captive Power Plant was set-up. He relied upon the Tribunal's decision in the case of Toyo Engineering Indus. Ltd. v. Collector of Customs, Bombay -1994 (70) E.L.T. 769 (Tri.) wherein the Tribunal had held that the existence of a Contract for the import of the consignment and the registration thereof in the Custom House prior to the clearances is a Sinecjuanon for classification of the goods as Power Projects.
5. We have carefully considered the matter. Under Exemption Notification No. 71/85-Cus., dated 17-3-1985, the goods falling under Heading No. 84.66 of the Tariff when imported for the Power Projects (including Gas Turbine Power Projects) were exempted from the whole of the customs duty. The exemption was subject to the condition that the importer produced a Certificate from an Officer not below the rank of a Joint Secretary to the Govt. of India in the Ministry administratively concerned with the said Power Project that the goods in question were required for the Power Project and recommend grant of the above exemption. Heading No. 84.66 covered various items of auxiliary equipments, components, etc., required for among others, Power Project.
During the period under consideration, there was no explanation for the description 'Power Projects' in the exemption Notification.
6. The respondents had submitted an application for registration of the Contract for importation of boilers and accessories under the Project Importation (Registration of Contracts) Regulations Act, 1965 read with the Heading No. 84.66 of the Tariff. The application was rejected by the Asstt. Collector of Customs on the ground that the Captive Power Plant was not a Power Project for the purposes of the Exemption Notification No. 71/85-Cus. although the machineries imported were entitled to the concessional rate of duty as project imports.
7. It is seen that by a subsequent Public Notice issued on 19-11-1985 it was notified that Captive Power Plants put-up in industrial plants did not merited classification as Power Projects but were to be treated as part of the Project in which they were set-up. It is not known as on what authority/understanding, the said Public Notice had been issued.
In the case before us the Order of the Asstt. Collector, Customs is dated 5-6-1985 and the Contract had been initially registered on 16-2-1985. Thus, the proceedings in the present case are prior to the date of the Public Notice, which is dated 19-11-1985. It is not clear as how when the exemption was in favour of Power Projects it could be denied on the ground that the said Power Project was a Captive Power Project. A Power Project is a Project for generation of Power. Before the High Court of Orissa, Cuttack, in the case of Indian Charge Chrome Ltd. v. .U.O.I - 1994 (72) E.L.T. 538 (Orissa), it was affirmed on behalf of the Revenue that the Original Notification i.e. Notification No. 133/85-Cus. did not contain any explanation excluding the Captive Power Plants from the benefit of exemption and that it brought within itself all the Power Projects (Refer Para 4 of the judgment). The Madras High Court in the Case of Chemicals & Plastic India Ltd. v.U.O.I. -1995 (78) E.L.T. 410 (Madras) had held in Para 10 of their judgment that "on the date of the Notification No. 133/85, intention was to exempt all power generation plants".
8. It is seen that exemption provided to Power Projects vide Notification No. 71/85-Cus., dated 17-3-1985 was continued under Notification No. 133/85-Cus., dated 19-4-1985 without any change in procedure. The Original exemption under Notification No. 71/85-Cus. had been superseded by Notification No. 132/85-Cus., dated 19-4-1985. It was only on 1-5-1986 that by amending Notification No. 306/86-Cus., dated 1-5-1986 an exemption was inserted at the end of Notification No.133/85-Cus., dated 19-4-1985 explaining that the expression 'Power Projects' shall not include Captive Power Plants set-up by units engaged in activities other than power generation. Thus, prior to 1-5-1986, there was no such explanation and no such restriction. Even if it is argued that this exemption was of a clarificatory nature for the period prior to 1-4-1986 it may not be just and proper to read such an explanation in Notification No. 71/85-Cus., dated 17-3-1985. It may be mentioned that amending Notification was struck-down by the High Court of Orissa at Cuttack in the case of Indian Charge Chrome Ltd. v.U.O.I - 1994 (72) E.L.T. 538 (Orissa). The Madras High Court had also quashed the latter part of the Notification No. 306/86 in the case of Chemicals and Plastic India Ltd. v. U.O.I-1995 (78) E.L.T. 410 (Madras).
9. In the facts and circumstances of the case, the Tribunal's decision in the case of Toyo Engineering India Ltd. v. Collector of Customs, Bombay 10. On a careful analysis of the matter, we find no infirmity in the Order-in-Appeal under challenge.
Accordingly, the appeal of the Revenue is rejected. Ordered accordingly.