2007 (8) TMI 515 - AT - Central Excise

Summary

Issues:
1. Compliance with exemption Notification No. 13/92 as amended.
2. Allegations of suppression of material facts.
3. Interpretation of the term "storage facility" in the context of excise exemption.
4. Recognition of Junia as a storage facility.
5. Entitlement for excise exemption based on the location of the first storage point.

Comprehensive Analysis:

1. The appeal challenges the order of the Commissioner of Central Excise, Jaipur, dated 14-5-2005, regarding compliance with the conditions of exemption Notification No. 13/92 as amended. The Commissioner observed that the appellants did not strictly comply with the conditions, specifically related to the exemption of pipes for water delivery.

2. The show cause notice dated 3-10-2006 alleges suppression of material facts by the appellants regarding the location of the first storage facility at Junia to Bhinay. It is claimed that the pipes supplied were misrepresenting the facts with regard to excise duty exemption. The layout plan submitted by the appellants did not provide explanations for relevant abbreviations, indicating a lack of transparency.

3. The interpretation of the term "storage facility" in the exemption notification is crucial. The department's representative argues that the exemption only applies to pipelines laid up to the first storage facility, in this case, Junia. Multiple storage facilities are not covered under the exemption, and subsequent reservoirs do not extend the jurisdiction of the notification.

4. The Collector and District Magistrate of Ajmer recognize Junia as an "intermediate reservoir for storage of water," confirming its status as a storage facility. The certificate dated 10-1-2005 supports the contention that the first storage point is indeed located at Junia. Therefore, only pipelines laid up to this point would be entitled to excise exemption.

5. The appellant relies on letters from the Chief Engineer of Public Health Engineering Department and the District Collector certifying the project's validity for exemption. However, the focus remains on the specific location of the first storage facility to determine the eligibility for excise duty exemption.

In conclusion, the judgment delves into the nuances of compliance with exemption conditions, allegations of suppression, and the precise interpretation of the term "storage facility" to determine the entitlement for excise duty exemption based on the location of the first storage point. The analysis highlights the importance of clarity and transparency in availing excise exemptions under the relevant notifications.