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of <h1>Imported Pipes Excluded from Project Benefits: Tribunal Upholds Decision</h1> The Appellate Tribunal upheld the denial of Project Import benefits to the appellants as the imported pipes were used in existing water distribution ... Project import - Drinking Water Supply Projects for supply of water for human or animal consumption - N/N. 21/2002-Cus. dated 1.3.2002 - Held that: - the appellants have imported pipes and utilized the same for drinking water supply project and not for water treatment project - appellants will not be entitled to the benefit of Project Import as well as Customs N/N. 21/2002. Reliance placed in the case of Pratibha Industries Ltd. Versus Commissioner [2015 (8) TMI 623 - SUPREME COURT], where it was held that Tribunal has rightly come to conclusion that appellant shall not be covered by Notification No. 21/2002-Cus., which grants complete exemption from payment of basic excise duty and additional duty falling under Heading 9801 required for drinking water supply project for supply of water for human and animal consumption. Appeal dismissed - decided against appellant. Issues:Interpretation of Project Import regulations for Drinking Water Supply Projects under Customs Tariff Heading 98.01 and Notification No. 21/2002-Cus.Analysis:The appellants registered for Project Imports under Customs Tariff Heading 98.01 for Drinking Water Supply Projects, seeking benefits under Notification No.42/96-Cus. and Notification No.21/2002-Cus. The dispute arose when the Department contended that the imported goods were not used for water treatment plants but for water transmission and distribution, thus denying the Project Import benefits. The Tribunal considered previous decisions and the Supreme Court's ruling in Pratibha Industries Ltd. case, which clarified that the Project Import benefit is restricted to water treatment plants and not applicable to pipes used in existing water distribution systems. As a result, the appellants were found ineligible for the benefits under Heading 98.01 of the Customs Tariff Act and Notification No. 21/2002-Cus.The Bangalore Bench of the Tribunal previously referred the matter to a Larger Bench due to conflicting views with the Bombay Bench's decision. However, the Supreme Court upheld the Bombay Bench's decision, leading to the dismissal of the appellants' appeals. The Hon'ble Supreme Court emphasized that the benefit of Project Import Regulations is only applicable to water treatment plants and not to pipes used in water distribution systems. The Appellate Tribunal, in line with the Supreme Court's ruling, concluded that the imported pipes were utilized for existing Water Distribution Improvement Schemes, not for Water Treatment Plant Units, rendering the appellants ineligible for the Project Import benefits under Heading 98.01 and Notification No. 21/2002-Cus.The Hon'ble Bombay High Court further reinforced the Supreme Court's decision in the case of J. V. Gokal & Co., affirming that Notification No.42/96 is exclusively for water treatment plants and does not extend to ductile pipes. Consequently, the Appellate Tribunal, following the apex court's decision and the Bombay High Court's ruling, dismissed both appeals, as the appellants imported pipes for drinking water supply projects, not water treatment projects, making them ineligible for the Project Import benefits.In conclusion, the Appellate Tribunal upheld the denial of Project Import benefits to the appellants as their imported pipes were used in existing water distribution systems, not in water treatment plants, in accordance with the Supreme Court's interpretation of the relevant Customs Tariff Heading and Notifications.
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