2018 (5) TMI 1455 - AT - Central Excise

Benefit of N/N. 6/2006-CE dated 1.3.2006 - denial on the ground that the certificate issued by the relevant authority, it is not clear whether the pipes are used to draw water from the source to storage reservoir or as a part of integral water supply project - Held that - as per notification, Sl. No. 2 does not prescribe any diameter for the pipes that is to be used whereas Sl. No. 3 prescribes that the pipes of outer diameter exceeding 20cm will be eligible for exemption when such pipes are integral part of the water supply project - From the certificate produced by appellant, it is clear that the pipes are used for carrying water from the source to treatment plant and to the reservoirs in various villages. For such reason, it is established that the pipes are used as integral part of water project and also for drawing water from the original source to the reservoir. The appellant having fulfilled the condition in the notification is eligible for the benefit of exemption from payment of duty - demand do not sustain - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Interpretation of Notification No. 6/2006-CE for exemption of duty on PVC pipes used in water supply projects.

Analysis:

Issue 1: Denial of benefit under Notification No. 6/2006-CE
The appellants, manufacturers of PVC pipes, were denied the benefit of duty exemption under Notification No. 6/2006-CE for supplying PVC pipes for a drinking water supply project. The dispute arose as the authorities questioned whether the pipes were used as an integral part of the water supply project, as required for exemption under the notification.

Issue 2: Commissioner's Decision and Arguments
The Commissioner (Appeals) confirmed the demand but set aside the penalties imposed on the appellants. The appellants argued that the Commissioner did not consider the documents submitted during the proceedings, which clearly indicated the intended use of the pipes in the water supply project. They contended that the certificates from the District Magistrate established the compliance with the conditions specified in the notification.

Issue 3: Interpretation of Notification No. 6/2006-CE
The Tribunal analyzed the relevant part of Notification No. 6/2006-CE, which specified different conditions for exemption based on the diameter of the pipes used in water supply projects. The Tribunal noted that the appellants had provided certificates from the District Magistrate confirming the use of the pipes for pumping water from the source to treatment plants and storage reservoirs, fulfilling the conditions for exemption.

Conclusion:
The Tribunal found that the appellants had met the requirements specified in the notification for duty exemption on PVC pipes used in water supply projects. As the pipes were established to be an integral part of the water project and used for drawing water from the original source to the reservoir, the demand for duty was set aside, and the appeals were allowed. The Tribunal's decision was based on the clear evidence provided by the appellants through the certificates issued by the District Magistrate, supporting their eligibility for the exemption under the notification.