2016 (5) TMI 936 - AT - Central Excise

Denial of claim for exemption on electric cables were supplied for river water pump house at project for drawing water from Godavari river - Notification No. 3/2004-CE dated 8.1.2004 - Revenue submitted that the Vemagiri Power Generation Ltd. was set up for the generation of power which is not entitled for said exemption - Held that - the electric cables were supplied for river water pump house at project for drawing water from Godavari river. The water is treated and used for the purpose of power generation. The required certificate from Collector, Godavari Distt. has been submitted. Setting up of water supply plant is for the intended purpose covered by the terms of the notification. The explanation only shows the inclusive scope of the water supply plants. Therefore, the impugned order passed after detailed examination of all the relevant points, can not be faulted. - Decided against the revenue

Summary

Issues:
Interpretation of exemption notification No. 3/2004-CE for electric cables used in a project for drawing water from a river for power generation.

Analysis:
The appeal by Revenue challenged the order of the Commissioner (Appeals) denying exemption of Central Excise duty to the respondents for clearing electric cables under notification No. 3/2004-CE. The Revenue argued that the exemption was only applicable to water supply plants for agricultural or industrial use, not power generation plants. The Respondent's counsel contended that the exemption was correctly applied to the goods in question.

Upon hearing both sides and examining the appeal records, the Tribunal focused on the applicability of the exemption under notification No. 3/2004-CE to the respondent. The Commissioner (Appeals) had already analyzed the issue in detail and found in favor of the Respondent. The electric cables were supplied for a river water pump house at a project drawing water from the Godavari river for power generation. The Tribunal noted that the water supply plant was set up for the intended purpose covered by the terms of the notification, with the necessary certificate from the Collector submitted. The explanation in the notification clarified the scope of water supply plants, supporting the Respondent's claim.

Ultimately, the Tribunal found no merit in the Revenue's appeal, upholding the Commissioner (Appeals) decision. The detailed examination of all relevant points in the impugned order led to the dismissal of the Revenue's appeal, affirming the exemption for the electric cables used in the project for drawing water from the river for power generation.