AI Drafter 
TaxTMI 
TaxTMI 
2023 (11) TMI 148
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....n as per Sl. No.7 (1) of Notification No. 6/2006 dated 01.03.2006 (presently Serial No. 233 of Notification No.12/2012 dated 17.03.2012) read with condition No. 4 of Sl.No.7 of Notification No.6/2006 dated 01.03.2006 (presently condition No.23 of Serial No.233 of Notification No.12/2012 dated 17.03.2012). As per the above Notification, the exemption was available to all items of machinery, including instruments, apparatus and appliances, auxiliary equipment and their component parts required for setting up of water treatment plants. The condition no.23 imposed by the Notification is that an assessee has to produce a certificate issued by the District Collector stating that the goods cleared for the intended use specified in column (3) of the Table of the Notification. 2. 'The condition no. 23 reads as under: "if, a certificate issued by the Collector or District Magistrate or 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....
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....District in which the plant is located. The appellant has produced the said certificate which states that the goods cleared by the appellant are used in the Pumping station for transmission of water from source to the water treatment plant. The department has taken the view that the goods cleared are not used at the water treatment plant itself and therefore the benefit of notification is not available to the goods. It is argued by Ld. Counsel that when the concerned authority has issued the certificate stating that the goods are used for the intended project, the department cannot disregard the said certificate and allege that the goods are not required / intended for the water treatment plant. The counsel submitted that in para 1 of the said Notification the words used are "for setting up of water treatment plant". The pumping station is used for pumping the water from the source to the water treatment plant and is an integral part for setting up of water treatment plants. Without carrying out the activity of pumping the water from the source to the water treatment plant the activity of treatment of water at the plant so as to make it potable cannot take place. 7. The Ld. Coun....
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....ara 5 above. The condition no. 23 for availing the exemption is that the assessee has to produce a certificate issued by the District Collector, certifying that the goods are intended for use as specified in coloumn 3 of the table. 13. In column 3 of the table as per para (1), all items of machinery, including instruments apparatus and appliances, auxillary equipment and other components / parts required for setting up of water treatment plant is eligible for exemption. The department has denied the exemption alleging that the goods are used for the sub station / pumping station as part of the water supply project and not specifically at the water treatment plant. The discussion by the original authority in order dated 16/11/2012 at para 12 reads as under: "12. In the present case, as per the certificates issued by the District Collector, the goods supplied by the taxpayer are intended for installation in the pumping stations which are located at the source away from the water treatment plant for pumping of water to the Water Treatment Plant. The goods as such are not for use at the Plant itself. The certificate issued by the District authority only certifies the use of....
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....icate issued by the Government authority is not disputed here The certificate as per the condition no 23 to the notification has to state that the goods are for intended purpose as specified in col 3 of the table. The state government authority have clearly stated in the certificate that the goods are intended for the specified purpose, i.e., for use at pumping station and for the water supply project. Nowhere in the certificate, it has been mentioned that the goods are for use in water treatment plant. Hence, by mere issue of certificate, the taxpayer would not be eligible for exemption notification, the goods are clearly covered within the specific description mentioned in the notification. 14. It is the case of the department, that as per the Explanation given in the notification, the benefit cannot be extended to the entire water supply project but only to the water treatment plant. We are not able to endorse this view of the department. The explanation only gives the meaning of water treatment plant and excludes the supply of water for industrial purposes. The explanation does not anywhere say that goods used for the project has to be excluded. In fact para 1 of the Notific....
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....o the requirement of obtaining a certificate from the Collector, District Magistrate, Deputy Commissioner of the District in which the plant is located. We And 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 un-amended 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 to the second and subsequent storage point, such as elevated storage reservoirs where the water was further treated for chlorination. If it was the intention of the Government to restrict the exemption for pipes upto first storage point, the Notification should have been accordingly worded from the beginning In the absence such a restriction, the Respondents Hive executed the Work Order in respect of Water Treatment....
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....ion being extended to pipes used for delivering water upto subsequent storage points which are part of the water treatment project." 10. In view of our findings as above, we hold that the impugned Order passed by the lower Appellate Authority extending exemption to the Respondents does not require any interference. Hence, we dismiss all the 30 Appeals filed by the Department in addition to two extra appeals filed by the Department." 7. Following the aforesaid decision which has been consistently followed and upheld by the Hon'ble Supreme Court, we do not find merits in the impugned order and consequently we set aside the same. The appeals are allowed with consequential relief, if any, as per law. 17. In the case of P & C Constructions Pvt. Ltd. (supra), the Tribunal observed that when certificate has been issued by District Collector, and TWAD Board stating that the goods are intended for setting up of the water treatment plant, the department cannot deny the exemption. The issue was in respect to the eligibility of credit on PSC pipes which were used for setting up of the water treatment plant and needed for carrying water from its source to the plant and ....
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....e Pipe Co. Ltd. (supra) has considered the identical facts and held that contention of Revenue is unsustainable. In the judgment relied upon by ld Counsel for appellant in identical circumstances, the issue has been held in favour of the appellant holding that they are eligible for the exemption. Following the same, from the discussions made above, we find that the demand is not sustainable and impugned order is set aside and appeals are allowed with relief if any as per law. 18. In the case of M/s. Indian Hume Pipe Company (supra) the issue was with regard to eligibility of exemption on pipes used beyond the first storage facility. The Tribunal relied upon the earlier decision and observed as under: "3. It is brought to our notice that in respect of the very same appellant, with reference to their Tirunelveli unit, the very same dispute was brought before the Tribunal for a decision. The Tribunal vide Final Order no. 41985-41988/2017 dated 06.09.2017 held as under:- 8. On the first issue regarding the liability of the appellant under Notification No 6/2002-CE, we note that all supplies of pipes are made in terms of the certificate issued by the jurisdictional ....
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.... and the appellant did collect the same. Support was taken from the ledger entry as indicated above. We note that the appellant accepted the said ledger entry which was also recorded in the show cause notice that they have reversed such entry recorded on due advice from the auditors. We note that even otherwise to apply the provisions of section 11D(1), it is to be clearly established that the appellant did collect any amount, in excess of excise duty payable, as if representing excise duty to invoke such provision. In the present case, no such evidence is available to attract the provisions of Section 11D(1) We also refer to the decisions of the Tribunal in the case of Poddar Industrial Corporation Vs Commissioner of Central Excise 2003 (158) ELT 473 (Tri. Kol); Commissioner of Central Excise Vs. Tapi RCC 2005 (186) ELT 107 (Tri. Mumbai), Shreyans Industries Ltd Vs. Commissioner of Central Excise 2005 (179) ELT 351 (Tri. Del) and Ascent Laboratories Ltd Vs Commissioner of Central Excise, Mumbai-2008 (221) ELT 583. In various decisions, Tribunal held that if there is a composite contract for consideration which show excise duty is inclusive, a demand under section 11D cannot be rai....