Amendment to Condition in Notification meant for exempting excisable goods cleared to mega power projects
THE Central Government has amended Condition No. 28 in Notification No. 6/2006-CE changing the ‘certifying authority' required to certify claims for exempting excisable goods cleared to mega power projects amongst others.
The previous Condition No. 28 reads as follows:
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 a Joint Secretary to the Government of India, in the Ministry of Power certifies that the goods are required for a project of the nature specified in column (3) against S. No. 91B of the table;
(c) the Chief executive officer of the project furnishes an undertaking to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction, to the effect that-
(i) the said goods will be used only in the said project and not for any other use; and
(ii) in the event of failure to observe sub-clause (i) above, the manufacturer will pay the duty which would have been leviable at the time of clearance of goods, but for this exemption. ”; (emphasis supplied)
Now this Condition No. 28 is amended to read as follows:
(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 goods are required for the setting up of the said mega power project under Government of India initiative, indicating the quantity, description, and specification thereof ; and
(c) the Chief executive officer of the project furnishes an undertaking to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction, to the effect that –
i. the said goods will be used only in the said project and not for any other use; and
ii. in the event of non compliance of sub-clause (i) above, the project developer will pay the duty which would have been leviable at the time of clearance of goods, but for this exemption. (emphasis supplied)
The other significant changes as per the new ‘Condition' are:
(i) that the certifying authority should certify that the goods are required for setting up the said mega power project under Government of India initiative
What do they mean by this – are these mega power projects not being set up as a part of the National Electricity Policy 2005 of the Government of India – irrespective of who is setting them up – whether PSUs or Private Sector – so why this specification?
(ii) in case of non-compliance of the specified conditions, the onus to pay excise duty is now shifted from the manufacturer of the excisable goods to the project developer.
Is there a mechanism to examine if the project developer has complied with the said conditions and if conditions are not complied with then, is there a mechanism to recover duty foregone from such project developer? Because, in our understanding, for all practical purposes Section 11A of the Act provides for recovery of duty not levied or not paid or short levied or short paid on account of any assessment relating to rate of duty (eligibility of exemption notifications would come under this aspect) from a manufacturer only.
Notification No. , Dated July 28, 2010
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