Bombay High Court Upholds CESTAT Relief To KEC International In ₹4.42 Crore Excise Matter

The Bombay High Court on 4 February dismissed a Central Excise Appeal filed by the Revenue against KEC International Ltd., holding that no substantial question of law arose from the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granting exemption benefits to the assessee.

A Division Bench of Justice B. P. Colabawalla and Justice Firdosh P. Pooniwalla, while hearing the appeal, held that the Tribunal had examined the material on record and concluded that there was substantial compliance with the exemption notifications; therefore, no interference was warranted.

They wrote:

“The conclusions reached by the Tribunal are purely fact based… there was substantial compliance of the provisions of the exemption notifications… substantial benefits could not be denied merely for a procedural lapse… We find that no substantial question of law arises from the impugned Order.”

KEC International Ltd., a manufacturer of electric wires and cables, faced a demand of about Rs. 4.42 crore on the allegation that it had availed exemption under Notifications No. 6/2006-CE, 12/2012-CE and other notifications for supplies made to international competitive bidding (ICB), ultra mega power and renewable energy projects without furnishing certain undertakings and intimations to the Department.

While the adjudicating authority confirmed the demand along with interest and penalty under Section 11AC of the Central Excise Act, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside the order.

The Tribunal noted that project certificates had been issued by the competent Ministry and marked to the Department. Invoices were verified by the jurisdictional officer, and the genuineness and quantum of supplies were not in dispute. It held that non-submission of certain undertakings constituted a procedural lapse and that exemption could not be denied when substantive conditions stood satisfied.

Accordingly, the appeal was dismissed.

Appearance for the Appellant: Adv. Maya Majumdar with Adv. Niyati Mankad and Adv. Priyanka Singh

Appearance for the Respondent: Adv. Bharat Raichandani with Adv. Bhagrati Sahu i/b. UBR Legal