CESTAT Chennai: Storage of agricultural produce not exclusive, incidental storage allowed

The Appellate Tribunal CESTAT CHENNAI held that the term "intended for storage of agricultural produce" under Notification No. 6/2002-CE did not require exclusive storage of agricultural produce only. As long as the goods were used for the intended purpose of storing agricultural produce, the notification benefit could not be denied, even if non-agricultural produce was stored incidentally. The Tribunal emphasized that the notification did not restrict the storage of other produce requiring cold storage alongside agricultural produce. Consequently, the appellant's use of the refrigeration equipment for storing agricultural produce was deemed compliant, leading to the appeal being allowed and the impugned order set aside.

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Issues:
Interpretation of the term "intended for storage of agricultural produce" under Notification No. 6/2002-CE - Whether it means exclusive storage of agricultural produce only.

Analysis:

Issue 1: Interpretation of the term "intended for storage of agricultural produce"
The case involved M/s. Western Fresh Ltd. applying for procurement and installation of Refrigeration equipments under Notification No. 6/2002-CE. The department alleged misuse of the equipments for storing non-agricultural produce. The appellant argued that the equipments were used for storing only agro products, and any non-agricultural produce stored was incidental. The core issue was whether the phrase "intended for storage of agricultural produce" implied exclusive storage of agricultural produce only.

The Tribunal referred to the Supreme Court judgment in State of Haryana Vs. Dalmia Dadri Cement Ltd., which clarified that the term "for use" means "intended for use" and not "used exclusively." Applying this principle, the Tribunal held that as long as the goods were used for the intended purpose of storing agricultural produce, the notification benefit could not be denied. The presence of a small quantity of non-agricultural produce alongside agricultural produce did not invalidate the notification. The Tribunal noted that the notification did not restrict the storage of other produce requiring cold storage along with agricultural produce. Additionally, the Tribunal highlighted that other entries in the same notification specified goods to be used "only for" a particular purpose, which was not the case here.

In conclusion, the Tribunal found that the appellant had not violated the notification conditions, as the impugned goods were used for storing agricultural produce as intended. Therefore, the impugned order was set aside, and the appeal was allowed with any consequential benefits as per law.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT CHENNAI provides a comprehensive understanding of the issues involved and the Tribunal's interpretation of the relevant legal provisions.

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