2012 (12) TMI 146 - AT - Central Excise

Exemption to pipes needed for delivery of water from its sources to the plant and from there to the storage facility. PSCC Pipes manufactured by the appellant were laid to make pipeline from Junia to Bhinay to carry untreated water. - Notification No. 6/2002-C.E. dated 1-3-02 as amended vide Notification No. 47/2002-C.E. dated 6-9-2003 - Held that - the Notification has to be interpreted to cover the pipes which were needed to deliver water not only up to the first storage point but also to the second and subsequent storage points such as elevated storage reservoir where water was further treated for chlorinisation. If the intention of the Govt. was to restrict the exemption for pipes upto first storage point the Notification should have been accordingly worded from the beginning. Assessee can avail the benefit of Notification as the notification is not worded about the various storage points properly - in favour of assessee.

Summary

Issues:
Availability of Notification No. 6/2002-C.E. for PSCC pipes under Chapter 68 of Central Excise Tariff Act during a specific period.

Analysis:
The dispute in the appeal revolved around the interpretation of Notification No. 6/2002-C.E. and its subsequent amendment regarding the exemption of PSCC pipes used for water delivery. The appellants claimed exemption under Sl. No. 196A of the said Notification for pipes laid to carry treated water from Junia to Bhinay. The Revenue contended that the exemption was only applicable up to the first storage point at Junia, leading to the issuance of a show cause notice alleging misrepresentation and suppression of facts. The Commissioner's order confirmed a duty demand of Rs. 1,87,77,776/-, interest, and a penalty of the same amount.

The key issue to be decided was whether the exemption under the Notification applied only up to the first storage point or extended to all points used for water delivery. The Tribunal referred to previous cases, notably Electrosteel Casting Ltd. and Lanco Industries Ltd., which interpreted similar Notifications. It was observed that the Notification did not restrict water delivery to the first storage point only, allowing for delivery to subsequent storage points as well. The Tribunal emphasized that if the government intended to limit the exemption, the Notification would have been worded accordingly. The Tribunal also highlighted that pipes delivering water to various storage facilities were eligible for the exemption under similar Notifications in previous cases, which were upheld by the Hon'ble Supreme Court.

Based on the precedent set by previous cases and the interpretation of the Notification, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellants. The decision was made after considering the relevant legal provisions, interpretations of similar cases, and the intention behind the Notification to grant relief to the appellants in this matter.