TaxTMI 
TaxTMI 
2009 (11) TMI 370
X X X X Extracts X X X X
X X X X Extracts X X X X
....ormal course. However, while clearing the said DIPs for the purpose of water supply project and for Water Treatment Plant (WTP), the appellants availed the benefit of the above said Notifications and cleared the said DIPs without payment of duty by producing the certificates issued by a Collector/District Magistrate/Deputy Commissioner of the District wherein the plant is located before the clearance of the said goods. The Revenue authorities entertained a view that the clearances made by the appellant by availing the benefit of the said Notifications as irregular, called for the details from the appellant. The appellant from time to time gave the details as was required. After considering the explanations given by the appellant and relying upon the Board's circular, the lower authorities issued 7 show cause notices to the appellant, details of which are as under :- Sl. No. SCN No.& date Cenvat Duty in Rs. Education Cess in Rs. S&H Education Cess in Rs. Total In Rs. 1 27/TCCE/2006-Adjn/30-10-06 83,76,068 1,67,523 -- 85,43,591 2 37/TCCE/2006- Adjn/25-1-07 3,06,92,292 6,13,846 -- 3,13,06,138 3 08/TCCE/2007-Adjn/25-1-07 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., "2. Doubts have been raised about whether the exemption pertaining to pipes applies only to pipes required for the setting up of water treatment plants or a/so to pipes for replacement of worn-out/damaged pipes. 3. The matter has been examined. In view of the policy objective of creating the requisite infrastructure for augmenting the availability of clean, potable drinking water, it is clarified that the aforesaid exemption would also apply to pipes required, for replacement and not just those for initial setting up". From the above clarification it is very clear that the pipes eligible for the benefit of Notification are those which are required in the initial setting up of water treatment plants i.e., the pipes used for delivery of water from source to a water treatment plant which is being set up and from there to the storage facility. Therefore, the pipes which are used for delivery of water from source to water treatment plant (WTP) being set up and/or pipes which are used for delivery of water from water treatment plant being set up to storage facility are eligible for benefit of Notification. The Notification read with Board's letter F. No. 354/129/2005-TRU, dated 28-10-2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bunal)]. The appeals preferred by the Revenue against both the aforesaid decisions have been rejected by the Supreme Court by orders dated August 24, 2009 and October 23, 2009 respectively. It is submitted that in view of the aforestated decisions of the Supreme Court the orders passed by the Tribunal in Commissioner of Central Excise v. Electrosteel Castings Ltd. (supra) and Commissioner of Central Excise, Customs & Service Tax (Appeals) v. IVRCL Infrastructures & Projects (supra) stands merged with the decisions of the Supreme Court. This is so even if the dismissal of both the appeals filed by the Revenue were in limine by non-speaking order, in view of the fact that the Supreme Court was exercising its appellate jurisdiction in terms of Section 351 of the Central Excise Act. In this regard reliance is placed upon the following decisions of the Supreme Court : (i) V.M. Salgaocar & Bros. Pvt. Ltd. v. Commissioner of Income Tax, 2000 (5) SCC 373, para 8 (ii) Kunhayammed v. State of Kerala, 2001 (129) E.L.T. 11 (S.C.), paras 41 to 44(i) (iii) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a semicolon after the end of Item No. (1)/(1) makes it clear that the two clauses are disjunctive. The words 'the plant' in Item No. (2)/(ii) simply means and has to mean any Water Treatment Plant. In this respect reliance is placed upon the following decisions : (i) State of Orissa v. Jogindar Patjoshi, 2004 (9) SCC 278 (S.C.), para 16, at page 285 (ii) M.K. Salpekar v. Sunil Kumar Shamsunder, 1988 (4) SCC 21, para-7 at page 25 (iii) Falcon Tyres Ltd. v. State of Karnataka, 2006 (6) SCC 530, para 11 at page 534 (iv) Samna Alana Abdulla v. State of Gujarat, 1996 (1) SCC 427, paras 7 &8, at page 430 Further, it is significant that the words used are 'the plant' and not 'the said plant'. In the absence of any such provision in either of the said Notifications no such requirement can he implied or read into the said Notifications. Thus the pipes used for intended purposes specified in the said Notifications are eligible for exemption. Whether they are used in or with a new plant or used with or intended to repl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed upon him, thereby rendering the said order illegal, invalid and had for this reason also. It is now settled by decisions of the Apex Court that if under an exemption notification a certificate is required to be issued, as a condition there under, of a prescribed/competent authority for availing the benefit under the said Notification, once such a certificate is issued by the prescribed/competent authority the Revenue cannot go behind such certificate and deny benefit of exemption under the said Notification. In the instant case, from Annexures I to VII of the said order, it would be seen that in each and every case certificate as required by the said Notifications about the intended use of the said goods in the concerned projects were given by the specified competent/prescribed authority. Copies of the said certificates are at pages 513 to 746 of the Paper Book — Vol. III. Once such certificates were submitted by the appellant, the Commissioner should have held and erred in not doing so, that the requirements under the said Notifications had been duly satisfied and the appellant was duly entitled to exemption under the said Notifications and had, therefore, correctly availed o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee to establish that post removal the said goods had in fact been used for the purpose as specified in the certificates. The Commissioner has no right, authority or jurisdiction to introduce in the said Notifications such a condition, which on a plain reading thereof is absent therefrom. No such power has been conferred upon him under the Act or the said Notifications. Once the certificates were issued by the competent/prescribed authority under the said Notifications, there was or remained no obligation on the part of the appellant to submit clarifications containing details as to whether pipes are used in water supply scheme or whether any new water treatment plant was being set up or constructed or as to the quantity of pipes used in different sections of the project etc. or to submit any schematic diagram of the water supply project/scheme and the benefit under the said exemption notifications could not be denied on these purported ground. The finding to the contrary by Commissioner in the said order is ultra vires the said Notifications and thus ex-facie untenable and unsustainable. The Commissioner by purporting to introduce such requirements has sought to introdu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... premises, neither the Central Board of Excise & Customs or any officer thereof or the Commissioner of Central Excise, all creatures of the statute, the Act, have any right, authority or jurisdiction to purport to import in the said Notification these expressions and thereby seek to restrict the benefit granted by the said Notification. The said Circular dated October 28, 2005 is, therefore, patently contrary to law, without jurisdiction and can have no applicability whatsoever. It is settled law that by issuing a circular subsequent to an exemption notification new condition cannot be added thereto restricting the scope of exemption or whittling it down. (i) Union of India v. Intercontinental (India), 2008 (226) E.L.T. 16 (S.C.) (ii) Tata Teleservices Ltd. v. Commissioner of Central Excise, 2006 (194) E.L.T. 11 (S.C.), para 10 (iii) Sandur Micro Circuits Ltd. v. Commissioner of Central Excise, 2008 (229) E.L.T. 641 (S.C.) The Commissioner has purported to rely upon the decision of the Constitution Bench of the Supreme Court in Commissioner of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n therefrom that the allegation that the certificates by the competent authority were not available in many cases is also patently incorrect and untenable. There is no such case. I. Without prejudice, the demand of Rs. 23,38,81,717/- covered by the show cause notice dated November 22, 2007, is barred by limitation. The show cause notice, issued on November 22, 2007 relates to pipes cleared during the period February, 2003 to October, 2005. The show cause notice therefore has been issued long after the prescribed period of one year contained in Section 11A(1) of the Act. In the premises, on this ground also, the demand of Rs. 23,38,81,717/- (out of the total demand of Rs. 41,30,31,281/-) is untenable and unsustainable as being barred by limitation. Contrary to the misconceived allegations in the show cause notice and finding in the said order, the condition precedent for invoking the extended period limitation contained in the Proviso to Section 11A(1) of the Act has not and cannot be said to have been satisfied in the instant case. In this respect reliance is placed upon the following decisions : (i) Firepro Systems Pvt. Ltd. v. Commr. of Service Tax, 2008 (10) S.T.R. 6....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nalties of Rs. 41,30,31,281/- under Section 11AC of the Act and again of Rs. 4 crores under Rule 25 of the said Rules is, therefore, contrary to law and thus illegal, invalid and untenable. Hence, the orders of the Commissioner confirming the duty demand as also imposition of penalty together with interest is required to be set aside with consequential relief in favour of the appellants. In this respect reliance is placed upon the following decisions : (i) FMC India Ltd. v. CCE, 2006 (193) E.L.T. 57 (T.), para 2.1(i) (ii) Ashwani Kumar Jain v. CC, 2004 (173) E.L.T. 260 (T), para 7 3.2 Ld. Sr. Counsel would also submit that the circular of the Board dated 4-3-2008 very clearly clarifies the issue as to the pipes which are required for replacement are also eligible for the benefit of the Notifications if they are used in WTP/Water supply plants. It is his submission that the certificate issued by the respective Collector/District Magistrate /Deputy Commissioner of the District in which such WTP is located is not disputed by the Revenue, as they are genuine and authenticate. It is his submission that the ld. Commissioner has gone beyond the certificates which were issued by t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icate that the article "the" has been used to precede "plant" in the Notification. He would also submit that the use of definite article is an indicative that the expression "the plant" in Clause (2) connotes only to new WTP being set up. 4.4 It is his submission that the Board's Circular dated 14-3-2008 is only effective from the date of issue of the circular. 4.5 He would submit that the arguments of the Department is restricting the scope of the circular by supplying the word "first" before the word "storage facility"; at the same time appellant is expanding the scope of 'storage facility' to 'storage facilities'. It is his submission that if Department's interpretation of supplying wording is objectionable then the interpretation of the appellant of adding the plural "storage facilities" is equally objectionable. 4.6 He would also draw our attention to the meaning of the word "The" given in the various dictionaries and would submit that the use of the word is for specifying or particularizing effect opposed to the indefinite or generalizing force of 'a' or 'an'. He would submit that his reading will be correct and harmonious to the interpretation of the Notification an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion 47A If, a certificate issued by the Collector/District Magistrate /Deputy Commissioner of the District in which the plant is located, is produced to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction, to the effect that such goods are cleared for the intended use specified in column (3) of the Table." The above said Notification remains the same in Notification No. 3/2004-C.E., dated 8-1-2004 and Notification No. 6/2006-C.E., dated 1-3-2006. 10. We have reproduced only that portion of the notification, to which we are concerned, and for the period wherein said Notifications applies. 11. It can be seen from the above reproduced clause of Notification, that the only condition which is required to be fulfilled by an assessee in order to avail the benefit of exemption is to produce the certificate issued by Collector/District Magistrate/Deputy Commissioner of the District in which the plant is located to the effect that such goods are cleared for intended use specified under Column No. 3 of the said table. In short, a certificate given by the competent authority that the goods which are cle....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o all items of machinery including instruments, apparatus and appliances, auxiliary equipment and their components/parts required for setting up of water treatment plants in terms of Sr. No. 7 of notification No. 6/2006-C.E., dated 1-3-2006. This exemption covers pipes needed for delivery of water from its source of the plant (including clear treated water reservoir) and from there to the storage facility as well as pipes of outer diameter exceeding 20 cm when they are an integral part of the water supply project. The exemption is subject to the condition that the manufacturer produces a Certificate to the effect that the goods are required for the intended purpose from the District Collector/Magistrate in which the plant is located. 2. Doubts have been raised whether the exemption pertaining to pipes applies only to pipes required for the setting up of water treatment plants or also to pipes for treatment of worn-out/damage pipes. 3. The matter has been examined. In view of the policy objective of creating the requisite infrastructure for augmenting the availability of clean, portable drinking water, it is clarified that the aforesaid exemption would also apply to pipes requ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Govt. of India in respect of pipes used in water treatment plant and water supply project, we find that the pipes which are supplied and used in existing treatment plant and for expansion of treatment plant up to storage facilities and from its source for delivery of water to the WTP, are eligible for the benefit of the Notifications. 15. As regards the second issue whether the pipes supplied are used for the delivery of WTP to the first storage facilities are only eligible for benefit of the Notification, we find that this Tribunal in the case of Electrosteel Castings Ltd. (supra) had held as under :- "8. After hearing both sides and perusal of the case records, we find that in the impugned Notification, pipes needed for delivery of water from its source to the plant and from there to the storage facilities have been exempted subject to the requirement of obtaining a certificate from the Collector, District Magistrate, Deputy Commissioner of the District in which the plant is located. We find that the required certificates have been obtained by the Respondents clearly showing that the impugned pipes were needed for delivery of water from the plant to the storage facilities....