Case Details: Nabha Power Ltd. Versus Punjab State Power Corporation Ltd. (2025) 33 Centax 318 (S.C.)
Judiciary and Counsel Details
- B.R. Gavai, CJI & Augustine George Masih, J.
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S/Shri C.S. Vaidyanathan, A.N.S. Nadkarni, Sr Advs., Mahesh Agarwal, Venkatesh, Rohan Talwar, Shashwat Singh, Ms Priya Dhankar, Naman Agarwal, Vishrov Mukerjee, Pratyush Singh, Advs., E.C. Agrawala, M/s. Trilegal Advocates, AOR’s, for the Appellant
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S/Shri M.G. Ramachandran, Sr Adv., Ms. Poorva Saigal, Ms Reeha Singh, Ms Gargi Kumar, Ms Pragati Bhatia, Ms Vasudha Priyansha, Advs., K.V. Mohan, Ms Sunieta Ojha, AOR’s, for the Respondent
Facts of the Case
The appellants, engaged in the establishment of large power projects, sought entitlement to deemed export benefits under Para 8.3 of the Foreign Trade Policy (FTP) 2009-2014. They contended that the embedded mega power plant installed at the project site qualified as ‘capital goods’ for the purposes of FTP. They further submitted that such plants, though immovable, ought to be treated as capital goods for claiming deemed export benefits, and that their procurement arrangements with subsidiaries, joint ventures, and related entities fell within the ambit of the FTP. The appellants additionally relied upon Paras 8.2, 8.3, 8.4.4, 8.6, and 9.36 of the FTP to argue that sourcing of components and equipment for generation of power was sufficient to trigger the benefit. The matter was accordingly placed before the Supreme Court.
Supreme Court Held
The Hon’ble Supreme Court held that entitlement to deemed export benefits under Para 8.3 of the FTP arises only where ‘goods’, as manufactured by the main contractor, are supplied to a power project, or where goods are manufactured by a sub-contractor and supplied either directly to the project or through the main contractor. It clarified that the term ‘goods’ denotes movable items only and cannot extend to immovable assets such as an embedded mega power plant of hundreds of Mega Watts, which by its very nature cannot qualify as ‘capital goods’ under the FTP. The Court observed that there was no distinct supply of goods in this case, since the appellants procured components directly through contracts with subsidiaries or related entities rather than through International Competitive Bidding. The Court accordingly concluded that the appellants failed to establish procurement of supply of goods in the manner mandated under the FTP and were not entitled to deemed export benefits.
List of Cases Cited
- Babu Verghese v. Bar Council of Kerala — (1999) 3 SCC 422 — Referred [Para 42]
- Bhor Industries Ltd. v. Collector — 1989 (40) E.L.T. 280 (S.C.) — Relied [Para 66]
- Collector v. Ambalal Sarabhai Enterprises — 1989 (43) E.L.T. 214 (S.C.) — Relied [Para 60]
- Commissioner of Income Tax v. N.C. Budharaja and Company — 1994 Supp (1) SCC 280 — Relied [Para 65]
- Commissioner of Income-Tax v. Geo Tech Oundation & Constructions — (2000) 241 ITR 90 — Relied [Para 65]
- GMR Warora Energy Ltd. v. Central Electricity Regulatory Commission — (2023) 10 SCC 401 — Referred [Para 39]
- Haryana Power Purchase Centre v. Sasan Power Ltd. — (2024) 1 SCC 247 — Referred [Para 38]
- Hindustan Polymers v. Collector — 1989 (43) E.L.T. 165 (S.C.) — Relied [Para 66]
- India Cine Agencies v. Commissioner of Income Tax — 2009 (233) E.L.T. 8 (S.C.) — Relied [Para 64]
- Moti Laminates Pvt. Ltd. v. Collector — 1995 (76) E.L.T. 241 (S.C.) — Relied [Para 66]
- MSCO Pvt. Ltd. v. Union of India — 1985 (19) E.L.T. 15 (S.C.) — Referred [Para 51]
- Nabha Power Ltd. v. Punjab State Power Corporation Ltd. — (2018) 11 SCC 508 — Referred [Para 41]
- Nabha Power Ltd. v. Punjab State Power Corporation Ltd. — 2025 (391) E.L.T. 434 (S.C.) = (2024) 24 Centax 74 (S.C.) — Relied [Paras 40, 44]
- P.C. Cheriyan v. Mst. Barfi Devi — (1980) 2 SCC 461 — Referred [Para 51]
- Quality Steel Tubes (P) Ltd. v. Collector — 1995 (75) E.L.T. 17 (S.C.) — Relied [Para 60]
- Shivshankara v. H.P. Vedavyasa Char — (2023) 13 SCC 1 — Referred [Para 38]
- Trutuf Safety Glass Industries v. Commissioner — 2007 (215) E.L.T. 14 (S.C.) — Referred [Para 51]
- Union Carbide India Ltd. v. Union of India — 1986 (24) E.L.T. 169 (S.C.) — Relied [Paras 60, 66]
- Union of India v. Delhi Cloth and General Mills Co. Ltd. — 1977 (1) E.L.T.(J 199) (S.C.) — Relied [Paras 60, 63]
- Vadilal Chemicals Ltd. v. State of Andhra Pradesh — 2005 (192) E.L.T. 33 (S.C.) — Referred [Para 51]
