TaxTMI 
TaxTMI 
2009 (11) TMI 370
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....aid 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 4,16,51,923 8,33,039 -- 4,24,84,962 4 35/TCCE/2007-Adjn/18-5-07 2,20,97,171 4,4....
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.... 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 28-10-2005, further clarifies that the pipes used for delivery from first storage point to subsequent storage points are not eligible for benefit of exemption under the....
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.... 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) Chandi Prasad v. Jagdish Prasad, 2004 (8) SCC 724, para 24 It is submitted that, in view of the decisions of the Supreme Court affirming the decisions of the Tribunal, stated here....
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....nt 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 replace old and damage pipes in an already existing plant and contrary findings of the Commissioner in the said order are incorrect, untenable and unsustainable. The aforesaid stands further affirmed b....
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.... 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 of the same in respect of the said goods manufactured and cleared during the said period. In this respect reliance is place upon the following decisions : (i) Zua....
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....ns 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 introduce further conditions in the said Notifications which he has no right, authority or jurisdiction in law to do. Reliance upon the decision of the Larger Bench of the Tribunal in the case of Bombay Hospital Trust, 2005 (188) E....
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....on 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 Central Excise v. Ratan Melting & Wires Industries, 2008 (231) E.L.T. 22 (S.C.) = 2008 (12) S.T.R. 416 (S.C.) to come to a conclusion that since the Hon'ble Court had not declared that the Circular dated October 20, 2005 was contrary to the statutory ....
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....ice 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. 606 (T.) (ii) Polyspin Ltd. v. Commr. of Customs 2007 (214) E.L.T. 347 (T.) (iii) Denson Pultretaknik v. CCE, 2003 (155) E.L.T. 211 (S.C.) (iv) Hyundai Unitech Electrical Transmission Ltd. v. CCE, 2005 (187) E.L.T. 312 (T.) Moreover, in the instant case decisions of b....
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....ther 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 the competent authorities. He would submit that the clarification sought by the Revenue was obtained by the appellant and submitted to the authorities, for which the adjudicating authority has said that these clarifications are not certified by the competent authority. It is his submission that....
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....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 and hence the benefit of Notifications is not available to the appellant in this case. 5. In his rejoinder, ld. Counsel for the appellant would draw our attention to the clarification certificate issued by the various authorities to indicate that such clarification was given in furtherance to the queries raised b....
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....e 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 cleared are intended to be used in water supply project, is sufficient for availing the benefit of exemption Notifications. 12. In the case before us, it is undisputed that the appellant had produced the requisite certificates issued by competent authorities before the lower authorities before clearing the product DIPs for WTP/Water supply project. Mere perusal of the few of the certifi....
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....ll 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 required for replacement and not just those for initial setting up. 4. Field formations may be suitably informed. (Vivek Johri) &n....
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....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. Secondly, we find that the Notification merely talks about the storage facilities and there is no restriction that the water should be delivered only to the first storage point, as has been provided in the amended Notification with effect from 1-3-07. It is obvious that the unamended Notification would have to be interpreted to cover the impugned pipes which were needed to deliver water not only to the first storage point but also....