TaxTMI 
TaxTMI 
2018 (7) TMI 690
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....en clearing A.C. Pressure Pipes and A.C. Couplings at Nil rate of duty under notification No.06/2006 dated 1.3.2006 as mended vide notification No.06/2007 dated 1.3.2007. Notification 6/2006-CE, exempts:- "(2) Pipes needed for delivery of water from its source to the plant and from there to the storage facility". 3. The notification covers products of chapter 84, or any other chapter of the First Schedule subject to the condition that :- " 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, 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". 4. The respondent produced the requisite certificate for the pipe and couplings, and cleared the same without payment of duty under the provisions of the said notification. 5. A show cause notice was issued and the respondent was asked to submit value of Couplings removed without payment of Central Excise Duty under the notification since beginning (2006 to 2009). Detailed reply has been file....
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....ification for pipe fittings which are cleared alongwith pipes. The issue is whether the 'pipe fittings' in the water supply network are also exempted. 2.0 The matter has been examined. It has been argued that in view of decision of the Supreme Court in the case of M/s Bharat Forge, the pipe and pipe fittings should be considered same. Therefore, the benefit of the notification No.6/2006-CE would also be available to pipe fittings. However, a careful reading of the said judgment revealed that it was delivered in the context of item No.26AA(iv) of the erstwhile Tariff, and in the said judgment, it was also observed that as the entries in the erstwhile Tariff and present Tariff are different, the entries in the present tariff cannot be used to interpret the entries in the old tariff. Therefore, the said judgment is not applicable to the present tariff, where pipes and pipe fittings are classified under different Tariff items. 3.0 Secondly, the intention behind the notification is to provide exemption only to pipes as understood in the common parlance and not to fittings which is a separate commodity and known differently in the market. 4.0 Further, e....
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....ed. Smaller pieces of pipes and tubes differently shaped are manufactured for this purpose. They are merely intended as accessories or supplements to the larger pipes and tubes. They are pipes and tubes made out of pipes and tubes. There is no change in their basic physical properties and there is no change in their end use. There is no reason why these smaller articles cannot also be described as pipes and tubes." 11. In Bharat Forge & Press Industries Private Limited's (supra) the Apex Court has held that merely because goods after processing become different commercial commodity or have a distinctive name does not change the excise classification if they continue to be goods of same species. Pipe fittings made out of pipes and tubes continue to be pipes and tubes. Therefore, it is not a different article for excise classification but only a smaller article within the same classification provided that there is no change in basic physical property and possible end use. The stand of the respondents before the adjudicating authority that the certificate issued by the competent authority (Deputy Commissioner, Kaithal) covered both pipes and couplings and thus, exemption is adm....
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....upply of water from its source to storage and the notification exempts the pipes needed for the purpose of delivery of water from its source to the plant and from there to the storage facility." Denial of exemption to coupling in the instant case will be denial of what the government wants to give them in public interest. It is only a master brain that can think of giving exemption to pipes but not to the pipe fittings/couplings. How on earth are the pipes going to be fitted? Was the idea to deny exemption to the pipe fittings or to exempt the goods used in water treatment plants? If the pipe fittings were not legally eligible for the exemption, the Board should have amended the notification and issued a Section HC Notification for the past period instead of communicating to the nation that this Board is against the very policy of the Government to provide water. Clearly the intention of the government is to exempt pipes including couplings for the amended public interest. It has been held by the Hon'ble Supreme Court that wordings in Exemption notification have to be construed keeping in view the object and purpose of the exemption- Oblum Electrical Industrie....
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....sion and thus exemption is available to the couplings. Further the Clarification issued by the board is neither an act nor rule framed under the law and thus cannot take away the benefit provided in the public interest by the Government. I further observed that Appellant, as per condition of the notification, has produced the certificate from the prescribed authority and genuineness of certificate has not been challenged by the department. Department cannot go behind the certificates and hold that the same is not acceptable. It has been held in so many cases by the CESTAT that production of the certificate must be treated as proof of the fact that the conditions enabling them to obtain the benefit under the exemption have been fulfilled. I find that the appellant for the purpose of the exemption was producing certificates to the department from the prescribed authority and all the facts were in the knowledge of the department therefore there is no suppression. In the light of above facts and circumstances of the case I find that the exemption contained in Notification No.6/2006-CE is available to product pipes and coupling of the appellant, which....
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....ndings are classified in a separate heading. 15. Learned Counsel for the appellant has submitted that the only substantial question of law which is arising in this appeal is "Whether the pipes and couplings falls under different heads at the relevant point of time?"and prayed that the appeal be admitted for final hearing. 16. A preliminary objection has been raised by the respondent-assessee regarding maintainability of the appeal and submitted that the appeal under Section 35-G of the Act of 1944 will lie to this Court in respect of an order, not being an order relating to among other things to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment. Section 35-G of the Act of 1944 excludes appeals involving the issue of valuation of goods and determination of their rate of duty, for purposes of assessment before this Court. Such appeals lie to the Apex Court, as per Section 35-L of the Act of 1944. She submitted that Section 35-L gives the power to the Hon'ble Supreme Court to entertain the appeals made under Section 35 (G) i.e., the case involving the issue of valuation and determination of r....
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....uestion relating to the rate of duty; to the valuation of goods for purposes of assessment; to the classification of goods under the Tariff and whether or not they are covered by an exemption notification; and whether the value of goods for purposes/of assessment should be enhanced or reduced having regard to certain matters that the said Act provides for. Although this Explanation expressly confines the definition of the said expression to Sub-section 5 of Section 129-D, it is proper that the said expression used in the other parts of the said Act should be interpreted similarly. The statutory definition accords with the meaning we have, given to the said expression above. Questions relating to the rate of duty and to the value of goods for purposes of assessment are questions that squarely fall within the meaning of the said expression. A dispute as to the classification of goods and as to whether or not they are covered by an exemption notification relates directly and proximately to the rate of duty applicable thereto for purposes of assessment. Whether the value of goods for purposes of assessment is required to be increased or decreased is a question that relates directly and....
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....urposes of assessment, an appeal against that order would lie only to the Supreme Court under Section 35 L and not to the High Court under Section 35 G. This would be so even if the appeal is only in respect of questions other than the rate of duty or the value of the goods for the purpose of assessment. It is the nature of the order of the Tribunal and not the scope of the appeal that determines the maintainability of the appeal under Section 35 G. 14. Whether an appeal lies to the High Court under Section 35 G or to the Supreme Court under Section 35 L cannot possibly depend upon the nature or scope of the appeal that the party intends filing. A party may seek to challenge only that part of the order of the Tribunal which relates to questions other than those relating to the rate of duty of excise or the value of the goods for the purposes of assessment. Such an appeal would, absent any other questions, lie to the High Court. Once it is held that an appeal against the order of the Tribunal which deals with questions that fall within the ambit of Section 35 L as well as other questions lies to the Supreme Court under Section 35 L the mere fact that the party chooses to ch....