Exemption for water supply facility goods upheld where the notification covered industrial use and similar water treatment processes.

Crucial exemption under Notification No. 03/2004 applied to cranes supplied for setting up a water supply facility for a thermal power plant. The notification covered a water supply plant used for desalination, demineralization, purification, or similar processes that make water fit for agricultural or industrial use. On that reading, the supply fell within the notification's scope, and denial of exemption by the lower authorities was not sustainable. The benefit could not be refused on a narrow view of industrial use, and the impugned order was liable to be set aside.

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Issues: Whether the appellant was entitled to exemption from duty under Notification No. 03/2004 dated 08.01.2004 in respect of cranes supplied for setting up a water supply facility.

Analysis: The notification explained that a water supply plant includes a plant for desalination, demineralization or purification of water, or for carrying out similar processes intended to make the water fit for agricultural or industrial use. The supply in question was for establishing a water supply facility for a thermal power plant, and therefore fell within the scope of the notification. The denial of exemption by the lower authorities was not sustainable.

Conclusion: The exemption was available to the appellant and the impugned order was liable to be set aside.

Ratio Decidendi: Where the goods are supplied for setting up a water supply facility that answers the description in the exemption notification, the benefit of the notification cannot be denied on a narrow view of industrial use.

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