2011 (7) TMI 272 - AT - Central Excise

Exemption - Notification No. 6/2006-CE dated 1.3.2006 - When the pipes are used for projects which supply water for both industrial and non industrial purposes whether the exemption would be available or not - There is no dispute that excise duty exemption is available for pipes needed for projects supplying water for animal or human consumption under Notification No. 6/2006-CE dated 1.3.2006 and pipes supplied to water projects used for agricultural or industrial use under exemption Notification No. 3/2004 - Both the notifications stipulate the condition that a certificate from the same District Collector should be obtained for availing the exemption - Held that - the pipes were used for the water supply project which was supplying bulk of the water for domestic use and even when it was used in the industry it was used for gardening and flushing of toilets which again are not in the nature of industrial use of water. It is also on record that even when it was used for industrial purpose it was used for purposes other than as raw material.Therefore non-mentioning of Notification No. 3/2004-CE in the said certificate obtained from the District Collector can at best be described as a minor technical infraction and for such minor technical discrepancy in the said certificate the substantive benefit granted under an exemption notification should not be denied - Decided in favour of assessee. .

Summary

Issues:
Appeal against Order-in-Original regarding Central Excise duty exemption for pipes used in water projects.

Analysis:
1. Facts of the Case: The main appellant supplied pipes for water supply projects in Nagpur under an exemption notification. The water was intended for both domestic and industrial use, with a majority for domestic consumption.

2. Exemption Notifications: The department issued a Show Cause Notice demanding Central Excise duty, claiming the exemption under Notification No. 6/2006-CE was not applicable due to industrial water use. The Commissioner confirmed the duty demand and penalties, leading to the appeal.

3. Appellant's Argument: The appellant argued that the pipes were mainly used for domestic water supply, with only a small portion for industrial use. They cited previous judgments where exemptions were granted despite mixed usage for export or power generation.

4. Department's Submission: The department contended that the exemption under Notification No. 6/2006-CE was exclusive of industrial water supply, and the appellant could have claimed under a different notification for industrial use.

5. Tribunal's Decision: The Tribunal analyzed the notifications and the usage of the supplied pipes. It noted that the exemption did not require exclusive human or animal consumption and found the appellant eligible for the exemption. The minor technical discrepancy in the certificate did not warrant denial of the substantive benefit.

6. Conclusion: The Tribunal allowed the appeal, setting aside the duty demand, interest, and penalties imposed by the Commissioner. The benefit of Notification No. 6/2006-CE was deemed applicable to the appellant based on the predominant domestic water supply usage, even with some industrial use.

This detailed analysis highlights the key arguments, legal interpretations, and the final decision of the Appellate Tribunal in the case concerning Central Excise duty exemption for pipes used in water projects.