Tribunal grants exemption under Notification No. 25/2012-ST for construction of ETPs and STPs.

The tribunal ruled in favor of the appellant, setting aside the order dated 27.10.2015. It held that the Commissioner erred in denying the exemption under Serial No. 13(d) of Notification No. 25/2012-ST for both the ETPs constructed for ONGC and the STPs constructed for NBCC. The tribunal found that the oil fields of ONGC did not qualify as a factory, and STPs could be considered as Wastewater Treatment Plants under the exemption. As a result, the appeal was allowed, and the appellant was granted the benefit of the Notification.

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Issues Involved:
1. Whether the order was beyond the show cause notice.
2. Whether the ETPs constructed for ONGC qualify for exemption under Serial No. 13(d) of Notification No. 25/2012-ST.
3. Whether the STPs constructed for NBCC qualify for exemption under Serial No. 13(d) of Notification No. 25/2012-ST.

Issue-wise Detailed Analysis:

A. Order is beyond the show cause notice
The appellant contended that the order confirmed the demand on grounds different from those in the show cause notice, which initially alleged the appellant was rendering commercial construction services. The order instead confirmed the demand on the basis that the ETPs were located in a factory and the STP did not qualify as an effluent treatment plant. The appellant relied on precedents such as Reckitt & Coleman of India Ltd. vs. CCE and Toyo Engineering India Limited vs. CC, Mumbai to support their argument that an order cannot exceed the scope of the show cause notice. The tribunal decided to examine this issue only if required after addressing the other issues.

B. ETPs constructed for ONGC
The demand for ETPs constructed for ONGC was confirmed because the Commissioner considered the oil fields of ONGC as a factory, thus denying the exemption under Serial No. 13(d) of Notification No. 25/2012-ST. The tribunal examined whether the oil fields, registered under the Mines Act, qualify as a factory. The term 'factory' was not defined in the Notification or the Finance Act, so reference was made to the Central Excise Act, 1944, which defines a factory as premises where excisable goods are manufactured or where a manufacturing process connected with production is carried out. The tribunal concluded that extraction of crude oil amounts to 'production' and not 'manufacture,' and thus, the oil fields do not qualify as a factory. The Commissioner erred in denying the exemption under Serial No. 13(d) of the Notification.

C. STPs constructed for NBCC
The exemption for STPs constructed for NBCC was denied on the grounds that the exemption is available only for pollution control plants and ETPs, and STPs do not qualify as such. The tribunal noted that STPs are set up to remove pollutants and contaminants from wastewater, including household sewage, and thus can be understood as Wastewater Treatment Plants. The tribunal referred to various dictionary definitions to establish that 'effluent' includes sewage, and therefore, a treatment plant for effluent management would include a sewage treatment plant. The Commissioner failed to appreciate the purpose of both treatment processes, and the exemption benefit under Serial No. 13(d) of the Notification should be available to the appellant.

Conclusion:
The tribunal ruled that the Commissioner committed an error in denying the benefit of the Notification dated 20.06.2012 at Serial No. 13(d) for both the ETPs constructed for ONGC and the STPs constructed for NBCC. Consequently, the impugned order dated 27.10.2015 was set aside, and the appeal was allowed. The tribunal did not find it necessary to address the issue of the order being beyond the show cause notice due to the favorable decision on the other issues.

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