Construction-site exemption for fabricated RCC pipes extended to approved alternate premises used solely for the project.

RCC pipes fabricated at approved alternate premises for a sewerage project were treated as goods manufactured at the construction site for exemption purposes, because the contract permitted manufacture at those locations and the pipes were used solely in that project. The later Explanation to the exemption notification was treated as clarificatory, expanding "site" to include premises made available for manufacture by specific contractual reference, where the goods are used only in the relevant construction work. Earlier CBEC guidance and Tribunal precedent supported this non-restrictive reading, resulting in exemption from excise duty.

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Issues: Whether RCC pipes fabricated at an alternate site, approved under the construction contract and used solely in the sewerage project, qualified for exemption as goods manufactured at the site of construction for use in construction work at such site.

Analysis: The exemption under Notification No. 5/2006-CE, as continued and later clarified by Notification No. 12/2012-CE, was intended to cover goods manufactured for use in construction work at the project site. The Explanation inserted in the later notification expanded the meaning of "site" to include any premises made available for manufacture by specific mention in the contract or agreement, provided the goods are used only in that construction work. The fabrication in the present case was undertaken at approved alternate locations because on-site manufacture was impractical, and the pipes were used entirely in the sewerage project. The earlier CBEC circular and Tribunal precedent supported a non-restrictive meaning of "site." In these circumstances, the later Explanation was treated as clarificatory and applicable to the dispute periods.

Conclusion: The pipes were entitled to exemption and no excise duty liability arose on them.

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