TMI Blog2009 (3) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... lia, in the manufacture of purification/filtration/desalination plants and anti scalant/anti corrosive agents for water purification falling under Chapter sub-heading 84212190 and 38249022 respectively of the Central Excise Tariff Act, 1985. 2. The appellants cleared 17 Nos. of the 'Reverse Osmosis Desalination Plants (hereinafter referred to as 'RODP') during November, 2005 and December, 2005, without payment of duty by availing exemption from payment of duty under Notification No. 6/2002-C.E., dated March 1, 2002, as amended vide Notification No. 47/2002 dated September 6, 2002 to the Ministry of Defence. 3. By a Show Cause Notice dated December 7, 2006, the appellants were called upon to show cause as to why: (a) the benefit of exemption claimed under Notification No. 6/2002-C.E., dated March 1, 2002, as amended vide Notification No. 47/2002 dated September 6, 2002 should not be denied to them; (b) the central excise duty of Rs. 87,16,610/- should not be demanded and recovered from them under the provisions of Section 11A(1) of the Central Excise Act, 1944; (c) interest should not be levied and recovered from them under Section 11AB ibid; (d) Penalty should not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssuming without admitting that what is supplied by them is water treatment plants, the words "ALL' preceding the description makes it clear that all equipments that are necessary for water treatment plant are exempt. This makes it clear that even if what is cleared will be enough for setting up entire water treatment plant will be exempt under Notification No. 6/2002. (iv) The language of the Notification is clear and ambiguous and the benefit of the Notification is not only available to all items of machinery including instruments, apparatus and appliances, auxiliary equipment and their components/parts required for setting up of water treatment plants but also to the plant itself. (v) The exemption under Notification No. 6/2002 dated 1-3-2002 as amended by Notification No. 47/2002 dated 6-9-2002 is applicable to the clearance of water treatment plant as clarified by the CBEC Circular No. 659/50/2002-CX., dated 6-9-2002. (vi) They have produced the requisite certificate from the appropriate authority in respect of each of the supply to the effect that the RODPs in question are cleared for intended use specified in the Notification No. 6/2002, as amended. Therefore, the Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 1-3-2002, as amended by Notification No. 47/2002-C.E., dated 6-9-2002 and condition No. 47A. (1) (2) (3) (4) (5) (6) "196A 84 or any other chapter The following goods, namely: (1) All items of machinery including instruments, apparatus and appliances, auxiliary equipment and their components/parts required for setting up of water treatment plants; (2) Pipes needed for delivery of water from its source to the plant and from there to the storage facility. Explanation. For the purposes of this exemption, water treatment plants includes a plant for desalination, demineralization or purification of water or for carrying out any similar process or processes intended to make the water fit for human or animal consumption, but does not include a plant supplying water for industrial purposes. Nil 47A Condition No. Conditions "47A If, a certificate issued by the Collector/District Magistrate/Deputy Commissioner of the District in which the plant is located, is produced to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or, to be more specific, to a water desalination plant, one cannot conclude that such Desalination Plant is not a plant but just an equipment or machinery required for setting up of water treatment plant. We, therefore, hold that what have been cleared by the appellants are Desalination Plants, which by themselves are water treatment plants in terms of Explanation below Sl. No. 196A of Notification No. 6/2002-C.E., dated 1-3-2002, as amended. 12. We now proceed to examine whether the exemption is also available to the entire plant. We extract below paras 1, 2 and 3 of the Board's Circular No. 659/50/2002-CX., dated 6-9-2002 in relation to exemption from Customs and Central Excise duty to Water Treatment Plants. "Notification 91/2002-Cus., 92/2002-Cus., 93/2002-Cus. and 47/2002-C.E., all dated 6th September, 2002 have been issued to extend exemption from Customs and Central Excise duties in respect of water treatment projects for supply of drinking water for human and animal consumption. 2. On the Customs side, such projects have been notified for the benefit of assessment as project import under heading 98.01 of the First Schedule to the Customs Tariff Act, 1975. The d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the treated water from its storage place to the place of consumption. The concessions would be subject to the certification by the Collector/District Magistrate/Deputy Commissioner of the district in which the water treatment plant is to be set up." 13. The text of the above referred CBEC Circular makes it very clear that the concession under Notification No. 47/2002-C.E., dated 6-9-2002 will be available regardless of whether the full plant is imported or only some: machinery/equipment is imported (including when it is imported in CKD/SKD). The Commissioner has held that the CBEC circular provides for exemption to the plant on the Custom side and not on the Central Excise side and that para 3 of the said Circular clarifies only about the exemption from excise duty to machinery, including instruments etc. required for suing up of water treatment plant intended to treat water to make it fit for consumption of humans or animals. We are of the view that this approach of the Commissioner is discriminatory. It can never be the intention of the Government to tax the goods manufactured in India and exempt identical goods imported from outside India. Once a benefit has been extended to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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