Exemption for water supply pipes upheld where an official certificate was not displaced by further enquiry.

Exemption under Notification No. 47/2002-CE was available for pipes used in a water supply project because the notification covered pipes intended for delivery of water from the source through the project system for purification and storage. The appellant's contract related to head works and pipelines in the project, and a Collector's certificate was issued specifically to support the exemption claim. As Revenue did not conduct any further enquiry to displace that certificate, and no prescribed proforma was required under the notification, the certificate could not be disregarded. The exemption claim was therefore accepted and the objection to exemption failed.

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Issues: Whether the appellant was entitled to exemption under Notification No. 47/2002-CE for pipes used in a water supply project, and whether the Collector's certificate supporting such use could be disregarded in the absence of further enquiry.

Analysis: The notification extended nil rate of duty to pipes intended for delivery of water from the source to the plant and onward to storage, including water purification or similar processes fit for human or animal consumption. The record showed that the appellant had a contract for execution of head works and pipelines in the water project, and the Collector's certificate was issued for the purpose of claiming the notification benefit. Although Revenue relied on a contrary view from the Executive Engineer, no further enquiry was undertaken with the Collector, and there was no prescribed proforma under the notification. In these circumstances, the certificate could not be discarded, and the lapse in investigation could not defeat the exemption claim.

Conclusion: The appellant was entitled to the benefit of the notification and the objection to exemption was rejected.

Ratio Decidendi: Where exemption under a fiscal notification is supported by an official certificate issued for that very purpose and Revenue does not conduct any further enquiry to displace it, the certificate cannot be ignored and the exemption cannot be denied on a speculative basis.

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