Exemption for water treatment plant equipment extended to pumping station goods used for conveying water, with refund allowed.

Goods supplied for use in a pumping station integral to conveying water to a water treatment plant were treated as eligible for exemption under the relevant notification, because the notification covered machinery, apparatus, auxiliary equipment and components required for setting up the plant. The prescribed certificates from the district authority were accepted as sufficient, as they showed the goods were intended for the pumping station and the wider water supply project. The view that the goods had to be physically used only inside the treatment plant was rejected, and the refund claims were allowed with consequential relief.

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Issues: Whether the goods supplied for use in pumping stations for conveying water to a water treatment plant were eligible for exemption under the relevant notification and consequent refund, when supported by certificates issued by the District Collector.

Analysis: The exemption covered all items of machinery, instruments, apparatus, appliances, auxiliary equipment and components required for setting up water treatment plants. The condition attached to the notification required production of a certificate from the competent district authority stating that the goods were cleared for the intended use specified in the notification. The certificates in the present case showed that the goods were intended for the pumping station and the water supply project, and the pumping station was an integral part of the process of setting up the water treatment plant because water had to be conveyed from the source to the plant before treatment could occur. The exclusion of the entire project was not supported by the wording of the notification, and the departmental view that the goods had to be physically used only within the treatment plant itself was not accepted.

Conclusion: The goods were eligible for the exemption, and rejection of the refund claims was not justified. The appeals were allowed with consequential relief.

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