TaxTMI 
TaxTMI 
2011 (7) TMI 272
X X X X Extracts X X X X
X X X X Extracts X X X X
....lf of M/s Nagarjuna Construction Corporation Ltd, Hyderabad and these pipes were utilized for supplying drinking water in MIHAN area at Nagpur. These pipes were laid for carrying raw water from the source at Wadgaon reservoir to the Treatment Plant at MIHAN area. These pipes were cleared without payment of Central Excise duty in terms of Notification No. 6/2000-CE dated 1.3.2006. The appellant had also obtained a certificate for the above supply from the District Collector, Nagpur District as stipulated in the said Notification. In terms of the agreement entered into between the Government of Maharashtra and the M/s Maharashtra Airport Development Company Ltd (MADC), (the nodal agency for infrastructure development of MIHAN area) the water ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r human and household consumption and the non-domestic use will be for gardening, flushing of toilet, industrial use for industries being set up in the MIHAN area. In view of the above statement read with the allocation of quota of water for the specified purposes in terms of the agreement entered into by the Government of Maharashtra, the department was of the view that the benefit of exemption under Notification No. 6/2006-CE will not be available inasmuch as water has been supplied not only for the purpose of human or animal consumption but also for industrial purposes. Accordingly, a Show Cause Notice dated 28.5.2002 was issued demanding Central Excise duty of Rs 5,44,70,146/- under Section 11A (1) of the Central Excise Act, 1944, inter....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther Exemption Notification No. 3/2004-CE dated 8.1.2004 which provided exemption to pipes needed for delivery of water for agricultural or industrial use. In the said Notification also, to claim the exemption, a certificate from the District Collector was required certifying that the pipes are intended for use for supply of water for agricultural or industrial use. The said Notification No. 3/2004 is also in existence. Notification No. 6/2006-CE which succeeded Notification No. 6/2002 provides exemption to pipes intended for use in water supply projects meant for animal or human consumption whereas Notification No. 3/2004 provides duty exemption to pipes intended for use for supply of water for agricultural or industrial use. Thus pipes me....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of this Tribunal in the case of CC vs Shefali Arts reported in 1999 (114) ELT 928. The said case dealt with Notification No. 159/86-Cus which provided duty exemption on machines used in the processing and manufacturing of gems and jewellery for the purpose of exports. A substantial part of the production was exported but a part of the product was also sold in the local market. The department sought to deny the exemption of the benefit under Notification No. 159/86-Cus on the ground that part of the product was sold in the domestic market. This Tribunal in that case held as follows: The notification requires that the machines should be used in the processing and manufacturing of gems and jewellery for the purpose of exports. If it we....
X X X X Extracts X X X X
X X X X Extracts X X X X
....smissed the department s appeal on merits. 3.3 Similarly, in the case of Union of India vs TISCO 1977 (1) ELT J 61 (SC) the Hon ble apex court held that set off of duty on proportionate basis is not deniable if duty paid materials are used in admixture with other materials unless the exemption notification specifically requires use of duty paid materials only or exclusively or entirely . The Hon ble apex court was interpreting Notification No. 75/62-CE dated 24.4.62 wherein exemption was provided on steel ingots produced out of scrap obtained from duty paid pig iron. The department sought to deny the exemption on the ground that duty paid pig iron was mixed with other non duty paid material. The department s contention was negatived....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nbsp; 5.1 There is no dispute that excise duty exemption is available for pipes needed for projects supplying water for animal or human consumption under Notification No. 6/2006-CE dated 1.3.2006 and pipes supplied to water projects used for agricultural or industrial use under exemption Notification No. 3/2004. Both the notifications stipulate the condition that a certificate from the same District Collector should be obtained for availing the exemption. The question is when the pipes are used for projects which supply water for both industrial and non industrial purposes, whether the exemption would be available or not.Notification No. 6/2006-CE grants exemption to pipes needed for delivery of water from its source to the plant and from ....