2009 (11) TMI 272 - AT - Central Excise

CESTAT affirms exemption for industrial project machinery under Notification No. 14/2004-Cus.

The Appellate Tribunal CESTAT, Mumbai upheld the decision that the respondent was eligible for exemption under Notification No. 14/2004-Cus. for their ... Water treatment plant- Notification No. 14/2004-Cus.- whether the respondent was eligible for the benefit of exemption Notification No. 14/2004-Cus., dated 8-1-2004 in respect of what they considered as a ‘project import’? Held that- The project import apparently fell within the ambit of the above exemption notification by virtue of the “Explanation” thereto. The respondent was eligible for the benefit, as rightly held by the learned Commissioner (Appeals). The present appeal is rejected. Issues:1. Eligibility for exemption under Notification No. 14/2004-Cus. for a 'water supply project' for industrial use.Analysis:The appeal before the Appellate Tribunal CESTAT, Mumbai revolved around the eligibility of the respondent for the benefit of exemption under Notification No. 14/2004-Cus. for a 'water supply project' intended for industrial use. The notification provided exemption from payment of CVD on 'water supply project' falling under Tariff Heading 9801 of the Customs Tariff Act, 1975, as well as exemption from basic customs duty. The definition of 'Water Supply Project' in the notification included processes like desalination, demineralization, or purification of water for industrial use. The respondent imported machinery for setting up a 'water supply project' for industrial use at a specific location. The essentiality certificate from the District Magistrate certified the necessity of the imported machinery for the project. However, the department contended that the project primarily functioned as an 'effluent water treatment plant' and thus did not qualify for the exemption.The Tribunal examined the order passed by the Commissioner (Appeals) and found valid reasons supporting the view that the Reverse Osmosis Membrane Filtration System used in the project fell within the definition of 'plant' under the 'Water Supply Project'. The essentiality certificate, along with other evidence, satisfied the conditions for exemption and supported the respondent's claim. Consequently, the Tribunal upheld the decision of the Commissioner (Appeals) that the project import qualified for the exemption under the notification. The Tribunal rejected the appeal, affirming the eligibility of the respondent for the exemption under Notification No. 14/2004-Cus. for their 'water supply project' for industrial use.