TMI Blog2009 (11) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... al No. 03/2009-(CX)(PNR) dated 23-1-2009. 2. The relevant facts that arise for consideration are :- The appellant herein had, during the period February, 2002 to February, 2007, availed benefit of exemption Notification No. 6/2002-C.E., dated 1-3-2002, Notification No. 3/2004-C.E., dated 8-1-2004 and Notification No. 6/2006-C.E., dated 1-3-2006 (hereinafter called as the Notifications) respectively. The appellants herein are manufacturers of Ductile Iron Pipes (DIP) and are clearing major quantity of this goods on payment of appropriate duty of excise in the normal course. However, while clearing the said DIPs for the purpose of water supply project and for Water Treatment Plant (WTP), the appellants availed the benefit of the above said Notifications and cleared the said DIPs without payment of duty by producing the certificates issued by a Collector/District Magistrate/Deputy Commissioner of the District wherein the plant is located before the clearance of the said goods. The Revenue authorities entertained a view that the clearances made by the appellant by availing the benefit of the said Notifications as irregular, called for the details from the appellant. The appellant f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary that the competent authority has to certify that the pipes cleared are intended for the use as specified in the Notification. 58. The assessee contended that Clause (2) of the notification extends benefit of Notification for pipes used for delivery of water from source to water treatment plant and from there to the storage facility/facilities irrespective of whether the water treatment plant is newly set up or otherwise and whether the storage facility is first storage facility or beyond. In this regard Board vide letter F. No. 354/34/2008-TRU, dated 14-3-2008 while clarifying that the pipes used for replacement of worn out/damaged pipe are allowed under the notification has clarified, "2. Doubts have been raised about whether the exemption pertaining to pipes applies only to pipes required for the setting up of water treatment plants or a/so to pipes for replacement of worn-out/damaged pipes. 3. The matter has been examined. In view of the policy objective of creating the requisite infrastructure for augmenting the availability of clean, potable drinking water, it is clarified that the aforesaid exemption would also apply to pipes required, for replacement and not just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cally rejected the Revenue's view (including that of the Commissioner in the present case) that the exemption under the said Notification is available only in respect of pipes up to the first storage facility : (i) Commissioner of Central Excise, Kolkata-III v. Electrosteel Castings, 2009 (235) E.L.T. 757 (T.) = 2009 (90) RLT 476 (T.-Kol.) (ii) Commissioner of Central Excise, Customs Service Tax (Appeals-III) v. IVRCL Infrastructures Projects Ors. - Final Orders No. 1431 and 1432/2008 passed in Appeal Nos. E/273 and E/274 of 2004 on December 24, 2008 (T.-Bangalore). [2009 (240) E.L.T. 606 (Tribunal)]. The appeals preferred by the Revenue against both the aforesaid decisions have been rejected by the Supreme Court by orders dated August 24, 2009 and October 23, 2009 respectively. It is submitted that in view of the aforestated decisions of the Supreme Court the orders passed by the Tribunal in Commissioner of Central Excise v. Electrosteel Castings Ltd. (supra) and Commissioner of Central Excise, Customs Service Tax (Appeals) v. IVRCL Infrastructures Projects (supra) stands merged with the decisions of the Supreme Court. This is so even if the dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d (i) in the second Notification it would be seen that the exemption thereunder is in respect of all items of machinery and its components/parts which are required for setting up of water supply plants. The said Notifications do not indicate in any manner that the pipes referred to under Sl. No. (2) of the first Notification and Sl. No. (ii) of the second Notification have to be related to the water supply plants to be set up under Item No. (1)/(ii) of the said Notifications. On the contrary the presence of a semicolon after the end of Item No. (1)/(1) makes it clear that the two clauses are disjunctive. The words 'the plant' in Item No. (2)/(ii) simply means and has to mean any Water Treatment Plant. In this respect reliance is placed upon the following decisions : (i) State of Orissa v. Jogindar Patjoshi, 2004 (9) SCC 278 (S.C.), para 16, at page 285 (ii) M.K. Salpekar v. Sunil Kumar Shamsunder, 1988 (4) SCC 21, para-7 at page 25 (iii) Falcon Tyres Ltd. v. State of Karnataka, 2006 (6) SCC 530, para 11 at page 534 (iv) Samna Alana Abdulla v. State of Gujarat, 1996 (1) SCC 427, paras 7 8, at page 430 Further, it is significant that the words us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions laid down in the Notifications have been duly satisfied and the Commissioner had no right, authority or jurisdiction to go beyond the said certificates and/or question the correctness thereof. The Commissioner in passing the said order has traversed beyond the jurisdiction conferred upon him, thereby rendering the said order illegal, invalid and had for this reason also. It is now settled by decisions of the Apex Court that if under an exemption notification a certificate is required to be issued, as a condition there under, of a prescribed/competent authority for availing the benefit under the said Notification, once such a certificate is issued by the prescribed/competent authority the Revenue cannot go behind such certificate and deny benefit of exemption under the said Notification. In the instant case, from Annexures I to VII of the said order, it would be seen that in each and every case certificate as required by the said Notifications about the intended use of the said goods in the concerned projects were given by the specified competent/prescribed authority. Copies of the said certificates are at pages 513 to 746 of the Paper Book — Vol. III. Once such certifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the misconceived finding in the said order there is no end use requirement under any of the said Notifications. The said Notifications nowhere required that the onus is on the assessee to establish that post removal the said goods had in fact been used for the purpose as specified in the certificates. The Commissioner has no right, authority or jurisdiction to introduce in the said Notifications such a condition, which on a plain reading thereof is absent therefrom. No such power has been conferred upon him under the Act or the said Notifications. Once the certificates were issued by the competent/prescribed authority under the said Notifications, there was or remained no obligation on the part of the appellant to submit clarifications containing details as to whether pipes are used in water supply scheme or whether any new water treatment plant was being set up or constructed or as to the quantity of pipes used in different sections of the project etc. or to submit any schematic diagram of the water supply project/scheme and the benefit under the said exemption notifications could not be denied on these purported ground. The finding to the contrary by Commissioner in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Board of Excise Customs or any officer thereof or the Commissioner of Central Excise, all creatures of the statute, the Act, have any right, authority or jurisdiction to purport to import in the said Notification these expressions and thereby seek to restrict the benefit granted by the said Notification. The said Circular dated October 28, 2005 is, therefore, patently contrary to law, without jurisdiction and can have no applicability whatsoever. It is settled law that by issuing a circular subsequent to an exemption notification new condition cannot be added thereto restricting the scope of exemption or whittling it down. (i) Union of India v. Intercontinental (India), 2008 (226) E.L.T. 16 (S.C.) (ii) Tata Teleservices Ltd. v. Commissioner of Central Excise, 2006 (194) E.L.T. 11 (S.C.), para 10 (iii) Sandur Micro Circuits Ltd. v. Commissioner of Central Excise, 2008 (229) E.L.T. 641 (S.C.) The Commissioner has purported to rely upon the decision of the Constitution Bench of the Supreme Court in Commissioner of Central Excise v. Ratan Melting Wires Industries, 2008 (231) E.L.T. 22 (S.C.) = 2008 (12) S.T.R. 416 (S.C.) to come to a conclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and untenable. There is no such case. I. Without prejudice, the demand of Rs. 23,38,81,717/- covered by the show cause notice dated November 22, 2007, is barred by limitation. The show cause notice, issued on November 22, 2007 relates to pipes cleared during the period February, 2003 to October, 2005. The show cause notice therefore has been issued long after the prescribed period of one year contained in Section 11A(1) of the Act. In the premises, on this ground also, the demand of Rs. 23,38,81,717/- (out of the total demand of Rs. 41,30,31,281/-) is untenable and unsustainable as being barred by limitation. Contrary to the misconceived allegations in the show cause notice and finding in the said order, the condition precedent for invoking the extended period limitation contained in the Proviso to Section 11A(1) of the Act has not and cannot be said to have been satisfied in the instant case. In this respect reliance is placed upon the following decisions : (i) Firepro Systems Pvt. Ltd. v. Commr. of Service Tax, 2008 (10) S.T.R. 606 (T.) (ii) Polyspin Ltd. v. Commr. of Customs 2007 (214) E.L.T. 347 (T.) (iii) Denson Pultretaknik v. CCE, 2003 (155) E.L.T. 211 (S.C.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd thus illegal, invalid and untenable. Hence, the orders of the Commissioner confirming the duty demand as also imposition of penalty together with interest is required to be set aside with consequential relief in favour of the appellants. In this respect reliance is placed upon the following decisions : (i) FMC India Ltd. v. CCE, 2006 (193) E.L.T. 57 (T.), para 2.1(i) (ii) Ashwani Kumar Jain v. CC, 2004 (173) E.L.T. 260 (T), para 7 3.2 Ld. Sr. Counsel would also submit that the circular of the Board dated 4-3-2008 very clearly clarifies the issue as to the pipes which are required for replacement are also eligible for the benefit of the Notifications if they are used in WTP/Water supply plants. It is his submission that the certificate issued by the respective Collector/District Magistrate /Deputy Commissioner of the District in which such WTP is located is not disputed by the Revenue, as they are genuine and authenticate. It is his submission that the ld. Commissioner has gone beyond the certificates which were issued by the competent authorities. He would submit that the clarification sought by the Revenue was obtained by the appellant and submitted to the authorities, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expression "the plant" in Clause (2) connotes only to new WTP being set up. 4.4 It is his submission that the Board's Circular dated 14-3-2008 is only effective from the date of issue of the circular. 4.5 He would submit that the arguments of the Department is restricting the scope of the circular by supplying the word "first" before the word "storage facility"; at the same time appellant is expanding the scope of 'storage facility' to 'storage facilities'. It is his submission that if Department's interpretation of supplying wording is objectionable then the interpretation of the appellant of adding the plural "storage facilities" is equally objectionable. 4.6 He would also draw our attention to the meaning of the word "The" given in the various dictionaries and would submit that the use of the word is for specifying or particularizing effect opposed to the indefinite or generalizing force of 'a' or 'an'. He would submit that his reading will be correct and harmonious to the interpretation of the Notification and hence the benefit of Notifications is not available to the appellant in this case. 5. In his rejoinder, ld. Counsel for the appellant would draw our attentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ict in which the plant is located, is produced to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction, to the effect that such goods are cleared for the intended use specified in column (3) of the Table." The above said Notification remains the same in Notification No. 3/2004-C.E., dated 8-1-2004 and Notification No. 6/2006-C.E., dated 1-3-2006. 10. We have reproduced only that portion of the notification, to which we are concerned, and for the period wherein said Notifications applies. 11. It can be seen from the above reproduced clause of Notification, that the only condition which is required to be fulfilled by an assessee in order to avail the benefit of exemption is to produce the certificate issued by Collector/District Magistrate/Deputy Commissioner of the District in which the plant is located to the effect that such goods are cleared for intended use specified under Column No. 3 of the said table. In short, a certificate given by the competent authority that the goods which are cleared are intended to be used in water supply project, is sufficient for availing the benefit of exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their components/parts required for setting up of water treatment plants in terms of Sr. No. 7 of notification No. 6/2006-C.E., dated 1-3-2006. This exemption covers pipes needed for delivery of water from its source of the plant (including clear treated water reservoir) and from there to the storage facility as well as pipes of outer diameter exceeding 20 cm when they are an integral part of the water supply project. The exemption is subject to the condition that the manufacturer produces a Certificate to the effect that the goods are required for the intended purpose from the District Collector/Magistrate in which the plant is located. 2. Doubts have been raised whether the exemption pertaining to pipes applies only to pipes required for the setting up of water treatment plants or also to pipes for treatment of worn-out/damage pipes. 3. The matter has been examined. In view of the policy objective of creating the requisite infrastructure for augmenting the availability of clean, portable drinking water, it is clarified that the aforesaid exemption would also apply to pipes required for replacement and not just those for initial setting up. 4. Field formations may be suitabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies are only eligible for benefit of the Notification, we find that this Tribunal in the case of Electrosteel Castings Ltd. (supra) had held as under :- "8. After hearing both sides and perusal of the case records, we find that in the impugned Notification, 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 required certificates have been obtained by the Respondents clearly showing that the impugned pipes were needed for delivery of water from the plant to the storage facilities. Secondly, 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, as has been provided in the amended Notification with effect from 1-3-07. It is obvious that the unamended Notification would have to be interpreted to cover the impugned pipes which were needed to deliver water not only to the first storage point but also to the second and subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. IVRCL Infrastructures Projects Ors. [Final Order Nos. 1431 1432/2008 dated 24-12-2008] [2009 (240) E.L.T. 606 (Tri.-Bang.] and held that the pipes which are used for delivering water to various storage facilities are also eligible for the benefit of the said Notifications. Aggrieved by such orders, Revenue moved in Civil appeal to the Hon'ble Supreme Court in both the cases. Hon'ble Supreme Court vide Orders dated 24-8-2009 and dated 23-10-2009 passed the following order :- "ORDER Delay condoned. The Civil Appeals are dismissed." 16. In our considered view, the pipes which are used for delivery of water from treatment plant to various storage facilities are eligible for the benefit of Notifications, is affirmed by the Hon'ble Supreme Court, we find that the second issue is squarely covered in favour of the assessee/appellant. 17. Since we have decided the issue on merits itself following the law as has been settled by the Hon'ble Supreme Court in an identical cases, we find that it is not necessary to record any findings on the other various submissions made by both sides. 18. In view of the above, we hold that the impugned order is not sustainable and is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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