2012 (8) TMI 722 - AT - Central Excise

Exemption Notification No. 3/2004 Water supply plants for agricultural and industrial use - Exemption to machinery, instruments, equipments and pipes used therein whether water which is stored reservoir within thermal power plant is used for the industrial purpose or for other purposes also - whether water is further treated before being used for industrial purposes Held that - From Dahej raw water reservoir, the raw water is pumped to industries and existing industries are treating/processing this raw water at their respective water treatment plant to make it fit for industrial uses - pipes have been laid for carrying water for industrial use and the water has been treated by the respective industries or by Thermal Power plant, as the case may be, to make it fit for the purposes for which it was intended - appellants eligible for the exemption Notification No. 3/2004, dated 8-1-2004 - pre-deposit waived

Issues:
1. Interpretation of Notification No. 3/2004-C.E., dated 8-1-2004 regarding exemption for machinery and pipes in water supply plants.
2. Compliance with the terms and conditions of the notification by the appellant.
3. Consideration of certificates issued by District Collectors for eligibility of exemption.
4. Discrepancy in the certificates provided by GIDC and IVRCL regarding the usage of GRP pipes.
5. Adjudication of duty demand, interest, and penalty under Section 11A(2) and Section 11AB of the Central Excise Act, 1944.
6. Applicability of case laws in similar contexts to the present case.

Detailed Analysis:
1. The case revolves around the interpretation of Notification No. 3/2004-C.E., dated 8-1-2004, which provides an exemption for machinery and pipes used in water supply plants for industrial purposes. The notification specifies the conditions for availing the exemption, including the requirement of a certificate from the District Collector confirming the intended use of the goods.

2. The appellant submitted certificates from GIDC and IVRCL to demonstrate compliance with the notification's terms. However, the Commissioner found discrepancies in the certificates, noting that they did not explicitly state that the GRP pipes were exclusively required for water supply to industrial plants as per the notification's conditions.

3. The certificates issued by the District Collectors played a crucial role in determining the eligibility of the appellant for the exemption. The certificates provided details about the usage of the GRP pipes for water supply purposes, but the Commissioner raised concerns about the clarity of the information regarding the specific use of the pipes as mandated by the notification.

4. The Commissioner's order highlighted the need for a thorough examination of whether the water supplied through the pipes was intended for industrial purposes and whether it underwent necessary treatment processes. The discrepancies in the certificates raised doubts about the appellant's adherence to the notification's requirements, leading to the denial of the exemption and imposition of duty demand, interest, and penalty.

5. The legal arguments presented by the appellant emphasized the alignment of their actions with the notification's provisions, citing relevant case laws to support their position. The appellant contended that the certificates and project details clearly indicated the industrial use of the water supplied through the GRP pipes, thereby justifying their eligibility for the exemption.

6. The Tribunal's analysis focused on reconciling the interpretations of the notification, the certificates provided, and the project specifics to determine the appellant's eligibility for the exemption. By referencing previous judgments and the specific project details, the Tribunal concluded that the appellant had made a prima facie case for exemption, warranting further examination during the final hearing.

In conclusion, the Tribunal granted a stay on the pre-deposit requirement pending the final hearing, acknowledging the complexity of the issues raised and the need for a detailed assessment of the appellant's eligibility for the exemption under Notification No. 3/2004-C.E.

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