2017 (5) TMI 1478 - AT - Central Excise

N/N. 3/2004-CE - Pipes cleared for water supply Project - whether on supplying PVC pipes under N/N. 3/2004-CE dated 08.01.2004 have violated the provisions of the Notification and the scheme of the Act/ Rules, and are liable to duty, which provides for exemption under Section 5A(1) of the Act? - Held that - the appellant have supplied the goods manufactured by them, PVC pipes etc. on the basis of certificate issued by the Collector, Kolhapur as required under N/N. 3/2003-CE and no error have been found by the Revenue in the said certificate - the similar issue came up before a coordinate Bench of this Tribunal in Koya & Co. Construction P. Ltd. vs. CCE, Visakhapatnam-II - 2013 (12) TMI 30 - CESTAT BANGALORE whereunder on similar facts and circumstances this Tribunal has allowed the benefit of the said notification on merits, holding that appellants have a case on merit on the ground that the pump house can be considered supply plant and cistern a storage point - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether the appellant, a manufacturer of PVC pipes, violated the provisions of Notification No. 3/2004-CE by supplying PVC pipes and is liable to duty.

Analysis:
1. The main issue in this appeal was whether the appellant, a PVC pipe manufacturer, violated the provisions of Notification No. 3/2004-CE by supplying PVC pipes and whether they were liable to duty. The notification provided for exemption under Section 5A(1) of the Act for items required for setting up water supply plants, including machinery, instruments, apparatus, appliances, auxiliary equipment, and pipes for water delivery. The condition for exemption required a certificate from the Collector/District Magistrate of the project location to be produced to the Central Excise authorities.

2. The appellant supplied goods to a water supply scheme based on a certificate issued by the Collector of Kolhapur. The certificate specified the construction of an Agricultural Water Supply Scheme and the purchase of items required for the water supply plant, including pipelines. The certificate aimed for the exemption of excise duty on equipment for the water supply scheme for Agricultural Purpose.

3. The Revenue's case contended that the scheme lacked water treatment facilities specified in the notification's explanation, such as desalination or purification of water, making the notification's benefit unavailable.

4. The appellant argued that they acted in good faith and supplied goods as permitted by the notification based on the Collector's certificate, asserting no violation on their part. They sought to set aside the show cause notice. The Revenue relied on the impugned order.

5. After considering the arguments, the Tribunal found that the appellant had supplied goods, including PVC pipes, based on the Collector's certificate as required by the notification. No errors were found in the certificate, and the proceedings were deemed misdirected. The Tribunal referenced similar cases where the benefit of the notification was allowed on merit. Consequently, the impugned order was set aside, and the appeal was allowed with relief for the appellant.