2023 (11) TMI 148 - AT - Central Excise

Refund of duty paid under protest - Department is of the view that goods cleared are not used at the water treatment plant itself and therefore the benefit of notification is not available to the goods - eligibility for the benefit of exemption of the Notification 6/2006 dated 1/3/2006 - HELD THAT - The condition no. 23 of the said notification for availing the exemption is that the assessee has to produce a certificate issued by the District Collector, certifying that the goods are intended for use as specified in column 3 of the table. In column 3 of the table as per para (1), all items of machinery, including instruments apparatus and appliances, auxillary equipment and other components / parts required for setting up of water treatment plant is eligible for exemption. The department has denied the exemption alleging that the goods are used for the sub station / pumping station as part of the water supply project and not specifically at the water treatment plant. Similar issue was considered by the Tribunal in the case of M/S MAN INDUSTRIES (INDIA) LTD, M/S SUBHASH PROJECTS MARKETING LTD, M/S THE INDIAN HUME PIPE CO. LTD VERSUS COMMISSIONER CE ST (LTU) MUMBAI 2019 (5) TMI 367 - CESTAT MUMBAI . The issue under consideration was whether the benefit of Notification is available to the pipes which were used beyond the first storage facility. The Tribunal held that the assessee would be eligible for the benefit of notification. In the case of P C CONSTRUCTIONS P. LTD. VERSUS COMMISSIONER OF CUSTOMS CENTRAL EXCISE, SALEM 2017 (8) TMI 1045 - CESTAT CHENNAI , the Tribunal observed that when certificate has been issued by District Collector, and TWAD Board stating that the goods are intended for setting up of the water treatment plant, the department cannot deny the exemption. The issue was in respect to the eligibility of credit on PSC pipes which were used for setting up of the water treatment plant and needed for carrying water from its source to the plant and from there to the storage facility. The Ld. AR has relied upon the decision in the case of M/S. PRECISE ENGINEER VERSUS COMMISSIONER OF CENTRAL EXCISE ST, VADODARA 2019 (3) TMI 944 - CESTAT AHMEDABAD . On perusal of the facts of the case, it is seen that the goods on which exemption was claimed by the appellant was Extension Bellows. The assessee claimed that these are components of water treatment plant. However, the facts do not show that the appellant had produced certificate issued by the District Collector stating that the goods were intended for setting up of water treatment plant. The rejection of the refund claims is not justified. The impugned orders are set aside - appeal allowed.

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 6/2006 dated 01.03.2006.
2. Validity of certificates issued by the District Collector for the intended use of goods.
3. Entitlement to refund claims for duty paid under protest.

Summary:

1. Eligibility for Exemption:
The appellants received orders for supplying goods to various projects and sought exemption under Sl. No. 7 (1) of Notification No. 6/2006, which was available for machinery required for setting up water treatment plants. The department denied the exemption, arguing that the goods were intended for use in pumping stations, not directly at the water treatment plant. The Tribunal noted that the condition for exemption required a certificate from the District Collector stating the goods were for the intended use specified.

2. Validity of Certificates:
The appellant produced certificates from the District Collector indicating the goods were for use in pumping stations for water transmission to the water treatment plant. The department contended these certificates did not specify the goods were for use at the water treatment plant itself. The Tribunal highlighted that the certificates issued by the government authority should be accepted unless explicitly stated otherwise. It was also noted that the pumping station and pipes carrying water to the treatment plant are integral parts of setting up a water treatment plant.

3. Entitlement to Refund Claims:
The appellants filed refund claims for duty paid under protest, which were rejected by the department. The Tribunal found that the certificates issued by the District Collector should suffice for claiming the exemption. Previous case law supported the view that goods used for the entire water treatment project, including pumping stations, should be eligible for exemption. The Tribunal concluded that the rejection of refund claims was not justified and allowed the appeals with consequential reliefs.

Conclusion:
The Tribunal held that the goods used in pumping stations are integral to setting up water treatment plants and thus eligible for exemption under Notification No. 6/2006. The certificates issued by the District Collector should be accepted, and the rejection of refund claims was unjustified. The appeals were allowed with consequential reliefs.