2019 (5) TMI 209 - AT - Central Excise

Supply of pipes to various projects processing and supplying water to various bleaching and dyeing units - benefit of N/N. 03/2004-CE, dated 08.01.2004 - Difference in quantities in two sets of certificates - HELD THAT - There is nothing in the notification which require nexus between the new certificate with the cancelled certificates. We also find that Ld. Counsel for the respondent has explained satisfactorily the reasons for the difference in quantities between the two sets of certificates. After examining the matter and the notification No. 03/2004-CE, dated 08.01.2004, we find that notification exempted pipes needed for delivery of water from its source to the plant and from there to the storage facility. In this case the pipes were being supplied for transporting effluent to treatment plants and treated water from the plant to the industrial units. The Revenue wants to deny exemption to the pipes which were used for transmission of water from the treatment plant to the industrial units. This denial is clearly not covered by the notification which exempts both pipes needed for delivery of water from its source to the plant as well as from there to the storage facility. The Revenue has not made out a case that storage facility is located in the plant only and not in the units which received the water. Adjustment of ₹ 68,72,164/- towards liability of the manufacturer under Rule 6 of CCR 2004 - HELD THAT - The Assistant Commissioner s attempt to pin the alleged liability of the manufacturer under CCR 2004 on the respondent, who is claiming refund is preposterous. It is not clear under what authority of law he sought to recover the CENVAT credit due from the manufacturer, from the buyer. We also find that this was beyond the scope of the show cause notice and is completely untenable. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Interpretation of exemption notification regarding supply of pipes for water projects.
2. Validity of revised certificates issued by District Collector.
3. Manufacturer's liability under CCR 2004 and adjustment of CENVAT credit.

Issue 1 - Interpretation of Exemption Notification:
The case involved appeals by the Revenue against orders concerning the exemption of pipes from Excise Duty under notification No. 03/2004-CE. The District Collector had issued certificates for the pipes, but the Department contested the eligibility for exemption. The CESTAT analyzed the facts and submissions, noting the cancellation and reissuance of certificates. The first appellate authority allowed the refund claim partially, prompting the Department's appeal. The CESTAT rejected the Department's argument, emphasizing that the new certificates did not need to replace the old ones and that the revised quantities were based on accurate information, affirming the first appellate authority's decision.

Issue 2 - Validity of Revised Certificates:
The second appeal by the Revenue concerned the rejection of an amount in the refund claim by the Assistant Commissioner, citing non-coverage under the exemption notification. The CESTAT examined the notification's scope, clarifying that the exemption applied to pipes for water delivery from source to plant and storage. The Revenue's contention regarding the transmission of water to industrial units was dismissed as not supported by the notification. Additionally, the attempt to recover manufacturer's liability from the buyer was deemed baseless, as it exceeded the show cause notice's scope. The CESTAT upheld the first appellate authority's decision, rejecting the Revenue's appeal.

Conclusion:
Both appeals by the Revenue were dismissed, affirming the decisions of the lower authorities regarding the interpretation of the exemption notification and the validity of the revised certificates. The CESTAT upheld the eligibility for refund and rejected the attempt to recover manufacturer's liability from the buyer, emphasizing compliance with the exemption notification's provisions.