2017 (1) TMI 594 - AT - Central Excise

Refund claim - Reverse Osmosis Plant - rejection on the ground that the goods supplied by the supplier and received by the appellant is not entitled for the benefit of notification - Held that - On going through N/N.3/2004, we find that the goods is specified in the notification are very broad and wide which in our view, even plant is also covered. The whole objective of the notification is that all the goods which are required for setting up of water supply plant are exempted. In the present case there is no dispute that the plant itself is a water treatment plant for supply of treated water for the industrial use. As per the description of the goods given in the notification read with explanation, we have no doubt that the Reverse Osmosis Plant received by the appellant is clearly covered by the exemption notification. Therefore it was not liable for any payment of duty, hence the duty paid on the same by the supplier is refundable. Appeal allowed - decided in favor of assessee.

Summary

Issues:
Refund claim rejection based on interpretation of exemption notification.

Analysis:
The appellant purchased a Reverse Osmosis Plant which was exempted under Notification No. 3/2004 CE. The supplier paid excise duty, and the appellant sought a refund. The original authority rejected the claim, stating the plant is not covered by the exemption as it was supplied as a whole. The Commissioner (Appeals) upheld this decision, leading to the appeal before CESTAT Mumbai.

The appellant argued that all items for setting up water supply plants are exempted under the notification. They contended that even though the plant was complete, it was used for setting up a plant in the factory, thus falling under the exemption. The appellant also claimed no unjust enrichment occurred as the duty did not pass to another person. They cited relevant judgments to support their case.

The Revenue supported the impugned order's findings. After considering both sides and the notification's text, CESTAT found the goods specified in the notification were broad, covering even the plant itself. The objective was to exempt all items required for setting up water supply plants. As the plant was a water treatment plant for industrial use, it fell under the exemption. CESTAT referenced the Rochem Separation Systems case, which supported their decision. The appeal was allowed, with the authority directed to verify unjust enrichment.