2017 (11) TMI 1322 - AT - Central Excise

Benefit of N/N. 6/2002-CE dated 01.03.2002 - denial on the ground that in the project for which the pipes are supplied there is no water treatment plant - deposit as per Section 11 D of the CEA, 1944 - Held that - identical issue decided in appellant own case M/s. The Indian Hume Pipe Co. Ltd., V. Karunakaran, C. Sridharan, S. Rajendran Versus Commissioner of Central Excise, Tirunelveli 2017 (9) TMI 695 - CESTAT CHENNAI , where relying in the case of Jain Irrigation Systems Ltd Versus Commissioner of Central Excise & Customs-Nashik 2017 (3) TMI 990 - CESTAT MUMBAI , where it was held that where certificates are the qualification for exemption, it is not open to the central excise authority to overrule that certification, the exemption was allowed - benefit of exemption allowed. Demand u/s 11D - Revenue held that since the contracted amount is inclusive of excise duty, when the appellant enjoyed exemption from excise duty, the amount collected should be construed as inclusive of excise duty and the said amount should have been deposited to the Govt. under Section 11D - Held that - in appellant own case as mentioned above, it was held that there is no evidence that the sales document namely invoices etc. indicated any excise duty separately so that the buyer has paid any money representing excise duty to the appellant. In the absence of such situation, the provisions of Section 11D cannot be attracted and the impugned order is without merit - demand set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility for exemption from Central excise duty under Notification No. 6/2002-CE.
2. Liability to deposit the amount collected in the name of excise duty under Section 11D of the Central Excise Act, 1944.

Eligibility for Exemption from Central Excise Duty:
The appeal challenged the Commissioner's order denying exemption from excise duty to the appellants engaged in manufacturing pre-stressed concrete pipes. The Revenue argued that the exemption condition was not met as there was no water treatment plant in the project supplied with the pipes. However, the Tribunal referred to a similar case involving the same appellant's Tirunelveli unit. The Tribunal emphasized that certificates issued by District Collectors supporting the exemption should be accepted unless repudiated. It cited precedents where certificates by government authorities were crucial for extending benefits, rejecting the Revenue's view. The Tribunal clarified that a treatment plant need not be elaborate and could include simple processes to make water fit for consumption. It highlighted that denial of exemption based on the absence of a treatment plant was untenable, given the consistent Tribunal findings in similar cases.

Liability under Section 11D of the Central Excise Act:
Regarding the liability to deposit collected amounts under Section 11D, the Tribunal analyzed the invoices and ledger entries. The Revenue contended that since the contracted amount included excise duty, the appellants should have deposited the collected amount as excise duty under Section 11D. However, the Tribunal noted that the invoices did not represent excise duty, and the Revenue's claim was based on inference rather than concrete evidence. The appellants had reversed ledger entries following auditors' advice. The Tribunal emphasized the need for clear evidence of collecting amounts exceeding excise duty to invoke Section 11D. It referenced various Tribunal decisions where demands under Section 11D were not upheld in cases of composite contracts where excise duty was inclusive. As the sales documents did not separately indicate excise duty, the Tribunal concluded that Section 11D provisions were inapplicable, rendering the impugned order meritless.

In conclusion, based on the Tribunal's previous decision in the appellant's similar case and the lack of evidence supporting the Revenue's claims, the impugned order was set aside, and the appeal was allowed.