1997 (10) TMI 265 - AT - Central Excise

Water Filter - benefit of exemption under Notification No. 155/86-C.E. and Notification 54/93-C.E. not available.

Summary

Issues:
- Interpretation of Notification 155/86 and successor Notification 54/93 regarding the benefit for water filters.
- Classification of the appellants' water purifier under the Notifications.
- Eligibility for exemption under the Notifications based on the capacity and storage features of the water filter.
- Comparison of the appellants' product with the parameters set in the Notifications for exemption.
- Applicability of legal precedents in determining the eligibility for exemption under the Notifications.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Madras revolves around the interpretation and application of Notification 155/86 and its successor Notification 54/93 concerning the benefit of exemption for water filters. The appellants, who manufacture water purifiers, were initially cleared at a NIL rate of duty under the mentioned Notifications. However, the jurisdictional Range officer raised concerns regarding the eligibility of the appellants' water purifiers for the exemption due to the specific capacity criteria outlined in the Notifications. The lower appellate authority denied the benefit of the Notifications to the appellants based on the description of the goods and the specified capacity limit of 40 litres. The authority emphasized that the exemption was intended for water filters with storage capacity, not continuous flow filters like the appellants' product.

In response, the appellants argued that their water purifier, although lacking storage capacity, effectively filters water continuously and should qualify for the exemption. They cited legal precedents and highlighted the ordinary domestic utility of their product, emphasizing its improved technology compared to traditional water filters eligible for the exemption. The appellants contended that the purpose of the Notifications was to extend benefits to various filters used for domestic purposes, including their advanced water purifier.

On the other hand, the department's representative argued that the exemption was linked to the storage capacity of water filters, making it applicable only to filters with the ability to store and dispense filtered water conveniently. Citing a tribunal decision, the representative emphasized that combining filtration with other purification methods could disqualify a product from the exemption, as seen in a similar case involving a water filter without storage capacity.

After considering both arguments, the Tribunal concluded that the benefit of the Notifications was intended for water filters with specific storage capacity parameters, as outlined in the Notifications. The Tribunal highlighted that the appellants' continuous flow water purifier did not meet the storage capacity criteria and utilized a different filtering methodology, thus not aligning with the parameters set for exemption. The Tribunal rejected the appellants' plea, emphasizing that the nature of the filter and its capacity did not satisfy the requirements specified in the Notifications, leading to the dismissal of the appeal.