Industrial treated water from effluent plants falls outside water exemption and is taxable as de-mineralized supply.

Treated water recovered from a common effluent treatment plant through multiple processing stages, including reverse osmosis, was analysed as industrial reuse water rather than exempt general-purpose water. The exemption for water under Sr. No. 99 covers water other than aerated, mineral, distilled, medicinal, ionic, battery, de-mineralized and sealed-container water, and the exclusion of "purified" did not change the classification on these facts. Because the product was treated as de-mineralized water supplied for industrial use and not as public drinking water, the clarification on drinking water and the later clarification on treated sewage water were not treated as governing. The supply was therefore taxable at 18% under the applicable Schedule III entry.

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Issues: Whether treated water obtained from a common effluent treatment plant and classifiable under Heading 2201 is eligible for exemption under Sr. No. 99 of the relevant exemption notifications, or is taxable at 18% under the applicable tariff entry.

Analysis: The entry exempting water covers water other than aerated, mineral, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container. The treated water supplied by the plant was found to be industrial reuse water obtained after multiple treatment processes, including removal of impurities and recovery by reverse osmosis, and was not water for public drinking purposes. The exclusion of "purified" from the entry did not alter the position because the product, on the facts, was held to answer the description of de-mineralized water rather than exempt general-purpose water. The clarification regarding drinking water for public purpose and the later clarification on treated sewage water were held not to govern the present industrial supply. The relied-upon earlier ruling involving a similar common effluent treatment plant supported the same classification.

Conclusion: The treated water obtained from the common effluent treatment plant is not exempt under Sr. No. 99 and is taxable at 18% under the applicable Schedule III entry.

Ratio Decidendi: Industrial treated water recovered through effluent treatment and reverse osmosis, which is effectively de-mineralized and supplied for industrial use, does not fall within the exemption for general water under Sr. No. 99 and is taxable under the relevant Schedule III entry.

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