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TMI Blog2004 (9) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... ibute in an improved manner the water to improve the system existing. The use in any manner in a Treatment Plant, could not be shown. There is no sponsorship certificate to cover such use. Eligibility under heading 9801 is not available. The settled law on the subject is that classification cannot be arrived at by looking at notifications of exemption of duty. However we find that the grant of exemption u/s 25(2) in exercise of powers of the Government when read with the scope of the Finance Ministers Budget speech the Boards classification fact that on Central Excise side, exemption to such pipes used anterior to Water Treatment Plant stage have been specifically granted, we find reason to conclude, that pipe lines for transfer from source of water to Water Treatment thereafter use in transfer distribution net work of drinking water are not covered by PIR or chapter 9801. Discretion of the Government to notify a project under 9801 cannot be challenged before us. A perusal of CBEC circular at 151165 instructions reveal that they provide that when practical difficulties arise they should be reported to Board for clarification. The imports in these cases should have been referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n No. 21/2000 are dated 1-3-2002. I find that pipes not being items in the nature of machinery/equipments or components for manufacture the same, do not appear to be covered under heading 9801 of the Customs Tariff and are not eligible for exemption from duty under projects. However, the appellants stated in his written submission that they are importing only ductile pipes and no machinery or raw materials. Further, the appellant also did not submit any document of project report----plan etc, on this aspect, I am inclined to agree with the stand taken by the lower authority. Hence I uphold the order of the lower authority and reject the appeal filed by the authority . Hence Appeal No. 692/2004. 2.1 Another importer, at Mumbai Custom House made an application dated 7-5-04 for registration of a contract under Project Imports Regulation 1986. The same was considered the respondent vide letter dated 8-6-04 was intimated by the Dy. Commissioner, that the application made for registration of the contract for supply of pipes is rejected. 2.2 The Commissioner (Appeals) vide order dated 18-6-04, found ordered- I have gone through the records of the case. The appellants wanted to register th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming the benefit of project import heading 98.01. The two case are different. The appellants contention is that a number of pipeline projects have been notified under clause (6) of heading 98.01. It is not disputed that pipes are integrate to the water supply project being in the nature of 'auxiliary equipments' as per the Tribunal decision. The item to be imported can also be called appliances in view of dictionary meaning and the same is clearly covered under heading 98.01. It has been pointed by the appellants at the time of personal hearing that import of pipes under project imports is also allowed to other importers by lower authority, in support of the same they have submitted a copy of Bill of Entry for import of pipes by M/s. Petronat LNG Ltd. vide F. No. S/5-42/2001 of the contract cell. So it is not understood why a different approach should have been taken in this case. It appears that the appellants are eligible for project import benefit under heading 8.01. Accordingly, I set aside the order of the lower authority allow the appeal with consequential relief. Hence Appeal No. 678/2004 by Revenue. 3.1 Early hearing application filed by Revenue assessee in C692 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Custom House in the manner specified in regulation 5 each such contract or contracts has or have been so registered, (i) Before any order is made by the proper officer of Customs permitting the clearance of the goods for home consumption. (ii) In the case of goods cleared for home consumption without payment of duty subject to re export in respect of fairs, xx, before the date of payment of duty. 5. Registration of Contracts - (1) Every importer claiming assessment of the goods falling under the said heading no. 98.01, on or before their importation shall apply in writing to the proper officer at the ports where the goods are to be imported or where duty is to be paid for registration of the contract or contracts, as the case may be. These regulations, prescribe registration of contract on application to be made a condition precedent to actual importation of the goods. In the case of appeal C/678/04 the import was on 6-5-04 while the application for registration of contract has been made on 7-5-04. The imports made, prior to registration of the contract, were not approved for classification clearance under Projects Imports by the Apex Court in a series of decision. Reliance by reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chandrapur already exists. Same has to be improved. It can therefore not be a project for initial setting up of a water supply system in Chandrapur. Therefore the registration has to be rejected as the declarations in application under DIR made thereunder, are for initial setting up , which is not supported by the actual purported use of imported pipes, as per the Map for the site produced. There is no recommendation for an Improvement to Chandrapur Water Supply Scheme Project from the prescribed sponsoring authority i.e. The District Collector Chandrapur. That authority has only recommended for an intended water supply system and not for Improvement of an existing system . (b) Considering heading 9801.00, the sponsored project in appeal C678/04 for 'Intended Purpose of setting up of drinking water supply' would only be covered under 6. Notification which would cover such other projects, as the Central Government may having regard to the economic development of the country notify in the official gazette Notification issued No. 49/96-Cus. dated 23-7-96 which vide amendment dated 91/2002 Cus. dated 6-9-02 has introduced item No. 26 which reads as - 26 drinking water supply, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly engineering (Civ. Engg.) A branch of Civil Engineering concerned with the development of sources of supply, transmission, distribution and treatment of water This authoritative understanding would induce us to conclude that 'Drinking Water Supply Project for Human Animal' will encompass and consists of the following units viz. - (i) Source of water supply (ii) Treat unit (filtration aeration pumping storage of source water as Drinking Water. (iii) Distribution network from the stored treated Drinking Water to sub storage etc pumping transmission up to the consumers (i.e. Human/animal) These 'units' have to be inter connected. This understanding has to be arrived at since there is no definition provided in the notification issued or relied by both sides before us of the term 'Drinking Water Supply Project'. This understanding when read with the explanation given in the notification (as extracted supra) would lead us to conclude that 'Units' of a Water Supply Project covered by the PIR as covered under 9801.0019, would be, only Water Treatment Plants' as brought out lucidly by the ld. DR for Revenue in the arguments. The coverage of Source of Wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing words ..............Hereby, we are certifying the quantities of pipes to be supplied are used for the transmission of water from source to W.T.P and up to the reservoir as indicated in the statement attached and verified by Ex. Bngineer Akola....... (h) Thus the certificate of the sponsoring authority is not for 'Water Treatment Plant' being exempted but is for supply of pipes to be used from source up to reservoir and the Water Treatment Plant, W.T.P as abbreviated in the Collector Letter dated 12-6-03. The water source supply of water to reservoir of such untreated water at the Water Treatment Plant would be a use in Unit of Water Supply System which is an 'Unit' anterior to the Water Treatment Plant Unit, while in the case of C/658/04 use was in an unit ulterior to Water Treatment Unit, both such uses would not be use covered by the notification issued under 9801 clause (6) coverage, as arrived by us. The use not being for Water Treatment Plant, the project notified has to be disallowed clearance under 98010019 or 9801.0020 9801.30 registration under PIR is not available. (i) The ld. Sr Counsel for Revenue took us through that the Finance Minister's Budge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied are not found relevant since the use as certified by the sponsoring authority i.e. District Collector is found in both case not as per the use claimed in the application made under PlR. The reliance on benefit on 9801 clearance to pipes is being granted by the department is being urged, is well met by Revenue, by showing that in those cases, the projects were for a Pipeline for distribution or and transmission of fluids/gas 'and or' for as components of a Petro or Chemical Complex. It is the use for a notified project that would be relevant for eligibility not the nature of entity itself, as is being urged. (k) The reliance on CBEC circular at 151165 by the appellant in C/692/04 will not make pipes imported eligible. A perusal of these instructions reveal that they provide that when practical difficulties arise they should be reported to Board for clarification. The imports in these cases should have been referred to the Board, and as in Kolkata Municipal Corporation case, Board could have suitably recommended for an ad hoc exemption. However that, itself cannot be a cause to register under PIR, contracts which are not eligible on a prima facie reading or classify the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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