2017 (12) TMI 608 - AT - Central Excise

Interpretation of statute - whether the phrase intended for storage of agricultural produce can be interpreted as intended for exclusive storage of agricultural produce only? - Held that - The Hon ble Apex Court in the case of State of Haryana Vs. Dalmia Dadri Cement Ltd. 1987 (11) TMI 94 - SUPREME COURT OF INDIA had gone into the interpretation of the term for use and had concluded that the term only means intended for use and that if the legislative intent was to allow exemption on actual use the words goods actually used or goods used would have been incorporated - However analogously applying the ratio therein to the facts of the present appeal the term intended to be used should not be interpreted as intended to be used only or intended to be used exclusively. The tenor and language of the relevant notification entry and condition certainly do not that carry any such rigidity. As long as the goods are used for the intended purpose in this case that of storage of agricultural produce the notification benefit cannot be denied. Storage of a small quantity of non-farm produce along with the agricultural produce cannot result in cancellation of the notification. It is not in dispute that the impugned goods were not used for storing agricultural produce or for that matter that only non-agricultural produce was stored therein - the appellant has not fallen foul of the notification - appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of the term "intended for storage of agricultural produce" under Notification No. 6/2002-CE - Whether it means exclusive storage of agricultural produce only.

Analysis:

Issue 1: Interpretation of the term "intended for storage of agricultural produce"
The case involved M/s. Western Fresh Ltd. applying for procurement and installation of Refrigeration equipments under Notification No. 6/2002-CE. The department alleged misuse of the equipments for storing non-agricultural produce. The appellant argued that the equipments were used for storing only agro products, and any non-agricultural produce stored was incidental. The core issue was whether the phrase "intended for storage of agricultural produce" implied exclusive storage of agricultural produce only.

The Tribunal referred to the Supreme Court judgment in State of Haryana Vs. Dalmia Dadri Cement Ltd., which clarified that the term "for use" means "intended for use" and not "used exclusively." Applying this principle, the Tribunal held that as long as the goods were used for the intended purpose of storing agricultural produce, the notification benefit could not be denied. The presence of a small quantity of non-agricultural produce alongside agricultural produce did not invalidate the notification. The Tribunal noted that the notification did not restrict the storage of other produce requiring cold storage along with agricultural produce. Additionally, the Tribunal highlighted that other entries in the same notification specified goods to be used "only for" a particular purpose, which was not the case here.

In conclusion, the Tribunal found that the appellant had not violated the notification conditions, as the impugned goods were used for storing agricultural produce as intended. Therefore, the impugned order was set aside, and the appeal was allowed with any consequential benefits as per law.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT CHENNAI provides a comprehensive understanding of the issues involved and the Tribunal's interpretation of the relevant legal provisions.