2016 (11) TMI 1436 - AT - Central Excise

Tribunal emphasizes duty exemption for water treatment project pipes despite Revenue's objections

The Tribunal allowed the appeal, emphasizing the importance of Revenue authorities diligently fulfilling their duties and conducting proper inquiries. The ... Benefit of N/N. 47/2002-CE dated 6.9.2002 - appellant purchased the intended goods for the purposes of use in the water treatment project and certified by the Collector of the respective District - Revenue says that there being no water treatment plant, appellant is not entitled to the benefit of the notification - Held that: - When the certificate of the Collector is perused, it shows that only the appellant was awarded the contract to carry out certain activities. That has also certified that there were certain materials required for execution of the Head Works and Pipe Lines from Coleroon River to various storage tanks and group sumps in the project - In absence of any proforma prescribed by the Notification, the certificate issued by the Collector was basis for the appellant to claim duty exemption - we are compelled to allow the appeal with the remark that Revenue authorities should not half-heartedly discharge their duty in the pretext of serving interest of Revenue - appeal allowed - decided in favor of appellant. Issues:Interpretation of Notification No. 47/2002-CE for duty exemption on pipes intended for water treatment project.Analysis:The judgment revolves around the interpretation of Notification No. 47/2002-CE regarding the eligibility for duty exemption on pipes intended for a water treatment project. The appellant claimed that the goods were purchased for use in a water treatment project and were certified by the Collector of the respective District, fulfilling the conditions of the notification. However, the Revenue denied the claim, asserting that there was no water treatment plant, and thus, the appellant was not entitled to the notification benefit.The Notification specified that pipes intended for delivering water from its source to the plant and for further distribution were eligible for nil rate of duty. It also included the definition of the plant for water desalination, demineralization, or purification processes for human or animal consumption, excluding plants for industrial purposes. The Revenue contended that the appellant did not have a water treatment plant, and the pipes were not intended for a water supply scheme, as confirmed by the Executive Engineer and the Collector's certificate.Upon examining the Collector's certificate, it was evident that the appellant was awarded the contract for specific activities related to the water project, as certified by the Collector. The certificate was issued in compliance with the Notification requirements, serving as the basis for the appellant's duty exemption claim. Despite the Executive Engineer's opinion that the supply was not for a water treatment plant, the Revenue did not conduct further inquiry with the Collector, leading to a lack of conclusive evidence to discard the Collector's certificate.Given the age of the matter and the lack of additional evidence, the Tribunal found it unproductive to remand the case for further investigation. Consequently, the appeal was allowed, emphasizing that Revenue authorities should diligently fulfill their duties instead of merely serving the Revenue's interest. The judgment highlights the importance of thorough examination and proper inquiry before rejecting claims based on certificates issued in compliance with relevant notifications.In conclusion, the Tribunal's decision underscores the significance of substantiating claims with comprehensive evidence and conducting thorough investigations to ascertain the validity of duty exemption requests based on official certifications.