Exemption for water supply plant goods denied where HDPE geomembrane film was neither machinery nor eligible pipework.

HDPE geomembrane film used in setting up a water supply plant was held not to fall within the exemption for specified machinery, auxiliary equipment, components, parts or water-delivery pipes under Notification No. 3/2004-CEX. The decisive point was that the goods were neither machinery nor a component or part of machinery, and they were not pipes used to carry water from the source to the plant or storage. A certificate issued by the District Collector could not extend the notification to goods outside its scope. The exemption was therefore unavailable and the appeal failed.

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Issues: Whether HDPE geomembrane film used for setting up a water supply plant was covered by Notification No. 3/2004-CEX dated 8.1.2004 so as to qualify for exemption.

Analysis: The notification extended exemption to specified items of machinery, including instruments, apparatus, appliances, auxiliary equipment and their components or parts required for setting up water supply plants, as well as pipes needed for delivery of water from the source to the plant and onward to storage. The goods in question were found to be neither machinery nor a component or part of such machinery, nor pipes for water delivery. The certificate issued by the District Collector could not assist where the goods themselves were outside the scope of the notification.

Conclusion: The goods were not eligible for exemption under the notification and the appeal was disallowed.

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