Government of India
Ministry of Finance
(Department of Revenue)
Tax Research Unit
New Delhi, dated the 29th December, 2011
The Commissioner of Customs (Imports), JNCH- Nhava Sheva, Mumbai.
Sub: Clarification on eligibility of Ash Handling Systems and Seamless Pipes as parts/ components of Ash Handling System under Project Import (CTH 9801)- reg.
The undersigned is directed to refer to the letter dated 26.07.2011 on the above mentioned subject. The issue has been examined in consultation with the Ministry of Power- the administrative Ministry for all Power Projects.
2. The exemptions to Mega/ Ultra-Mega Power Projects were extended to augment the power generation capacities in the country considering the acute shortages and requirements. The facilities such as Ash Disposal System including ash dyke, water intake including treatment and storage facilities and coal transportation facilities are essential for viability and sustenance of Mega/ Ultra-Mega power Projects and hence are considered vital and inalienable part of such projects. Moreover, facilities like Ash Disposal System are considered essential to mitigate environmental concerns and therefore, rank high in the priority list for such exemptions. Since a Heading corresponding to Project imports (98.01) does not exist in the First Schedule to the Central Excise Tariff Act and there were likely to be divergence in interpretation between Customs and Central excise as also between basic Customs & additional duties, the description of heading 98.01 has been borrowed for the purpose of S.No. 91A of notification no.6/2006-CE. The explanation in the latter in respect of Ash disposal system has been inserted “for the removal of doubt” which implies that it was always meant to be included. The description of Heading 98.01 is pari passu with entry at S. No. 91A, the explanation would also be valid for determining the scope of “Mega Power projects” under heading 98.01 for the purpose of Basic Customs Duty.
3. The eligibility of seamless pipes as parts/ components of Ash handling system under ‘Project imports’ is to be decided on the basis whether the subject goods are parts/ components of the Ash handling systems or not. Such issues are governed by the General Rules for Interpretation and lie in the domain of the Assessing Officer.
4. In view of the above it is stated that facilities such as Ash Disposal System including ash dyke, water intake including treatment and storage facilities and coal transportation facilities are an integral part of Mega Power project and therefore customs duty exemption for import of these goods under Mega power policy is available.