2016 (10) TMI 907 - AT - Central Excise

Benefit of exemption under N/N. 6/2002 CE dated 01.03.2002 as amended by Notfn No. 47/2002-CE dated 06.09.2002 - contract of construction of pipeline - whether the department s view that in the assessee s contract there is no element of water treatment plant hence they are not eligible for exemption justified? - Held that - the decision in the case of CCE., C. & ST. (A-III), HYDERABAD Versus IVRCL INFRASTRUCTURES & PROJECTS LTD. 2008 (12) TMI 198 - CESTAT, BANGALORE relied upon where it was held that pipes needed for delivery of water from its source to the plant and from there to the storage facilities have been exempted subject to the requirement of obtaining a certificate from the Collector, District Magistrate, Deputy Commissioner of the District in which the plant is located. We find that the Notification merely talks about the storage facilities and there is no restriction that the water should be delivered only to the first storage point benefit of exemption available. Benefit under the exemption notification available - appeal dismissed - decided against Revenue.

Summary

Issues:
Interpretation of exemption notification for duty exemption on goods used in water treatment projects.

Analysis:
The case involved a dispute regarding the interpretation of a notification granting duty exemption on goods used in water treatment projects. The assessee believed that goods used for delivering water from the source to the treatment plant and further to storage facilities were eligible for exemption under the notification. However, the department contended that the exemption was only applicable up to the first storage point and not beyond that. The Commissioner (Appeals) allowed the benefit of exemption but remanded the matter to ensure the certificate produced by the assessee complied with the exemption notification.

The department appealed against this decision on the grounds that the legislation clearly intended to limit the exemption to the first stage of storage only, as clarified in a circular. They argued that the notification should not be interpreted contrary to the legislative intent. The department reiterated these grounds during the appeal process.

On behalf of the assessee, it was argued that a similar issue had been addressed by the Tribunal in a previous case, where it was held that the exemption notification applied to pipes required even beyond the first storage point. The Tribunal reasoned that the notification did not restrict the exemption to the first storage point, and the intention of the government was crucial in interpreting the notification. The Tribunal also noted that the department's attempt to restrict the exemption was not supported by the language of the notification.

The Tribunal, after considering the arguments and the previous decision, upheld the Commissioner (Appeals)'s decision, stating that the exemption could not be restricted to the first storage point. The Tribunal dismissed the Revenue's appeals, emphasizing that the exemption notification should be interpreted based on its language and intent. The Tribunal found that the Commissioner (Appeals) correctly applied the law, and therefore, the appeal was dismissed. The judgment was in line with a decision by the Hon'ble Apex Court, further solidifying the correctness of the Commissioner (Appeals)'s decision.