CESTAT Mumbai rules RO Plant qualifies for exemption, aligning with objective, supported by precedent.

The CESTAT Mumbai allowed the appeal, finding that the Reverse Osmosis Plant purchased by the appellant fell under the exemption notification as it was used for setting up a water treatment plant for industrial use. The goods specified in the notification were interpreted broadly to cover even the plant itself, aligning with the objective of exempting all items required for setting up water supply plants. The appellant's argument that the plant qualified for the exemption was supported by relevant judgments and the decision in the Rochem Separation Systems case. The authority was directed to verify unjust enrichment.

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Issues:
Refund claim rejection based on interpretation of exemption notification.

Analysis:
The appellant purchased a Reverse Osmosis Plant which was exempted under Notification No. 3/2004 CE. The supplier paid excise duty, and the appellant sought a refund. The original authority rejected the claim, stating the plant is not covered by the exemption as it was supplied as a whole. The Commissioner (Appeals) upheld this decision, leading to the appeal before CESTAT Mumbai.

The appellant argued that all items for setting up water supply plants are exempted under the notification. They contended that even though the plant was complete, it was used for setting up a plant in the factory, thus falling under the exemption. The appellant also claimed no unjust enrichment occurred as the duty did not pass to another person. They cited relevant judgments to support their case.

The Revenue supported the impugned order's findings. After considering both sides and the notification's text, CESTAT found the goods specified in the notification were broad, covering even the plant itself. The objective was to exempt all items required for setting up water supply plants. As the plant was a water treatment plant for industrial use, it fell under the exemption. CESTAT referenced the Rochem Separation Systems case, which supported their decision. The appeal was allowed, with the authority directed to verify unjust enrichment.

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