2019 (4) TMI 581 - AT - Central Excise

Goods cleared for construction of water treatment plant - benefit of N/N. 06/2006-CE dt. 01/03/2006 (Sl.No.7) - duty free benefit denied - mentioning of wrong notification number - Held that - At the time of clearance of the goods in September, 2006, Notification No.6/2006 extended the benefit of duty free clearance for various goods required for setting up of water treatment plants. This was subject to the condition that a certificate is issued by the District Collector or other authorities of the district in which the plant is located - The N/N. 6/2006 replaced the earlier N/N. 47/2002 dt. 06/09/2002. The wording of the original notification has been retained in the new notification substantially. The CBEC Circular referred to in the certificate issued by the District Collector dt. 06/09/2002 was issued in the context of exemption N/N. 47/2002 dt. 06/09/2022. The goods covered by the said certificate are intended for construction of water treatment plant for Krishna Drinking Water Supply Project. The fact that the certificate has mentioned a different N/N. 3/2004 dt. 08/01/2004 cannot take away the substantial benefit intended for setting up of water treatment plant for drinking water supply project - Mistake in mentioning the wrong notification number cannot be the sole reason for denying the benefit to the assessee which they were otherwise eligible. The goods cleared by the appellant cannot be denied the exemption - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Claim for duty-free benefit for goods cleared for construction of water treatment plant under Krishna Drinking Water Supply Project. Interpretation of Notification No.06/2006. Validity of certificate mentioning the wrong notification number.

Analysis:
The appellant, a manufacturer of electric motors, cleared certain motors without duty payment for the Krishna Drinking Water Supply Project based on a certificate issued by the District Collector. The dispute arose as the certificate incorrectly mentioned Notification No.3/2004 instead of the correct Notification No.6/2006. The authorities demanded duty, interest, and penalty, which the appellant challenged.

The appellant argued that the certificate adequately covered the goods for the water treatment plant project, emphasizing the substantial benefit intended for the project. They cited case laws where similar demands were set aside. The Revenue contended that the certificate did not mention the correct notification and was issued before the relevant Notification No.6/2006. The Revenue also argued that Notification No.3/2004 was for different purposes.

The Tribunal examined the case, noting that the goods were intended for the water treatment plant project as per the certificate. The Tribunal held that a mistake in mentioning the wrong notification number should not deny the appellant the benefit they were eligible for. Citing precedents, the Tribunal emphasized that a certificate confirming the goods' intended use sufficed for exemption under the Notification.

Ultimately, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal. The judgment highlighted the importance of the certificate's substance over minor discrepancies in notification numbers, ensuring the appellant received the intended duty-free benefit for the water treatment plant project.