2010 (12) TMI 562 - AT - Central Excise

Waiver of pre-deposit - Benefit of Notification No. 3/2004-C.E., dated 8-1-2004.- Department contended that the pipes supplied were not eligible for the benefit of the Notification in view of the fact that pipes were not used for transportation of water from water treatment plant to the storage plant, as provided in the Notification - Held that - the purpose of the water supply facility and the pumping house and system, etc., is to supply water for agricultural house and the fact is that the explanation only enlarges the definition of water supply plant to include desalination, demineralization or purification of water plant and does not restrict it to only desalination, demineralization or purification of water plant,find that appellant has been able to make out a prima facie case in their favour - Decided in favour of assessee.

Summary

Issues:
1. Eligibility for Central Excise duty exemption under Notification No. 3/2004-C.E.
2. Allegations of suppression of facts and mis-declaration by the Appellant.
3. Interpretation of the definition of water supply plant under the Notification.
4. Grant of waiver of pre-deposit and stay against recovery of dues during appeal.

Eligibility for Central Excise Duty Exemption:
The Appellant supplied PSC pipes for a specific project without paying Central Excise duty, claiming benefit under Notification No. 3/2004-C.E. The department disputed the eligibility, leading to a duty demand and penalty imposition. The Appellant argued that the pipes were used for delivering water from its source to the plant and storage facility, supported by a certificate from the District Collector. They contended that the pipes met the Notification's criteria and there was no suppression of facts.

Allegations of Suppression of Facts:
The Respondent alleged that the project did not have a water treatment plant as required by the Notification. They highlighted a letter from the Executive Engineer stating the absence of a water treatment plant or storage facility. The Respondent argued that the project being a Lift Irrigation Project without specific water treatment facilities meant the exemption was rightly denied. They claimed suppression of project details from the department.

Interpretation of Water Supply Plant Definition:
The Tribunal analyzed the inclusive definition of a water supply plant under the Notification. They concluded that the absence of desalination, demineralization, or water purification plants did not disqualify the pipes from the exemption. Emphasizing that a water supply plant need not be limited to specific purification facilities, the Tribunal found the Appellant's case prima facie in their favor. Consequently, they granted a waiver of pre-deposit and stay against recovery of dues during the appeal.

Grant of Waiver and Stay:
Considering the arguments and evidence presented, the Tribunal decided in favor of the Appellant, waiving the pre-deposit requirement and granting a stay against the recovery of dues during the appeal process. This decision was based on the interpretation of the Notification's provisions and the Appellant's compliance with the broader definition of a water supply plant as per the explanation provided in the Notification.