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TMI Blog2023 (7) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... uty under the scheme. The appellant cleared two consignments of Koch Membrane Systems provisionally. They produced an installation certificate dated 22.02.2006 and the remittance details from their bankers. Before finalization of the assessment, the Customs Receipt audit vide their memo dated 07.02.2008 observed that according to Regulation 3(a) (ii) of the import Regulations 1986 an industrial unit will not include single machinery of Composite machinery within the meaning assigned to it as per Notes 3 and 4 to Section XVI of the Customs Tariff Act, 1975 and that Reverse Osmosis Plant being a composite machinery is not eligible for concessional rate of duty under Project Imports. A demand notice was issued on 14.02.2008 demanding duty alon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akrishnan appeared and argued for the respondent. The relevant Notification No.14/2004-Cus reads as under:- Water supply projects for agricultural and industrial use- Exemption "In exercise of the powers conferred by sub-Section(1) 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts Water Supply Projects, falling under heading 9801 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), from whole of the duty of customs leviable thereon under the said First Schedule, and from whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act. Explanation.-Water Supply Project includes a plant for de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dated 08.01.2004 on the goods imported viz., Koch Membrane Systems. The Department has contended that the imported goods are merely Membranes and not Membrane System. The brochure of the imported goods has been furnished by the Ld. counsel for the respondent. The product description along with the performance reads as under:- Performance:- "Performance specifications shown on the front side of this document are nominal value, individual element permeate flows may vary+20/-75% from the values shown. Minimum chloride ion rejection is 97.5% at the conditions show. System performance should be predicated using KMS ROPRO design software Element performance within ROPRO is based on the nominal values shows. System operating data should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed the requisite "essentiality certificate" from the sponsoring authority, namely District Magistrate of Moradabad, who certified that the machinery proposed to be imported were required for setting up of "water supply project" for industrial use. The department enquired about the exact nature of the project. They found that the effluent water generated by the plant it was treated in a Biomethanation System to produce biogas. The effluent from the said system was converted into bio-manure in a bio-composting plant. The "Biomethanated Spent Wash" from the Bio-Digester, after recovering the biogas, was fed to "Reverse Osmosis Membrane Filtration System". The output from this filtration system consisted of two streams of water - 50% pure wat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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