Custom, Excise & Service Tax Tribunal
Cce, C & St, Hyderabad-Iii vs M/S Larsen & Toubro Ltd on 25 August, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Division Bench Court I Appeal No. E/771/2007 (Arising out of Order-in-Appeal No. 22/2007 (H-III) C.E. dt. 03.08.2007 passed by CC, CE & ST (Appeals), Hyderabad) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Honble Sh. Madhu Mohan Damodhar, Member(Technical) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? CCE, C & ST, Hyderabad-III ..Appellant(s) Vs. M/s Larsen & Toubro Ltd., ..Respondent(s)
Appearance Sh. Arun Kumar, Deputy Commissioner (AR) for the Appellant.
Sh. N. Viswanathan, Advocate for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Honble Sh. Madhu Mohan Damodhar, Member(Technical) Date of Hearing: 25.08.2016 Date of Decision: 25.08.2016 FINAL ORDER No._______________________ [Order per: Madhu Mohan Damodhar] Brief facts:
Assessee was awarded the contract of construction of pipeline from Gudakondla Clear water reservoir to Gungal Master balancing reservoir. The clearances of all goods by the assessee were at NIL rate of duty under claim of Notification No. 6/2002 CE dated 01.03.2002 as amended by Notfn No. 47/2002-CE dated 06.09.2002, on their belief that goods used for delivery of water from source to treatment plant and further to storage facility, are eligible for exemption. The department took a view that in the assessees contract there is no element of water treatment plant hence they are not eligible for exemption. Accordingly a speaking order was passed against the assessee denying them the exemption and ordering appropriation of the Bank Guarantee in this regard.
2. The assessee preferred an appeal before the Commissioner (Appeals) who vide order 03.08.2007 allowed the benefit of exemption Notfn. 47/2002-CE dated 06.09.2002, however remanded the matter to the original authority to satisfy himself that the certificate produced by the assessee serves the purpose of the exemption Notification. Hence this appeal by department on the following main grounds:
(i) The notification initially was intended to give benefit of duty exemption to the water treatment plants, which makes water potable for human consumption. Later, as it was felt that bringing of water from source to the treatment plant and after treating to the storage facility also forms part of the treatment system and the pipes and equipment required for this was also incorporated in the notification. However, once the treated water reaches the storage from the treatment plant the benefits of the notification ceases to exist beyond this, and this was exactly the intention of the notification that was clarified by the board in its circular F.No. 354/129/2005-TRU dated 28.10.2005.
(ii) The instant case the legislation is clear and in unambiguous terms has clarified that the exemption is available to 1st stage of storage only, as is evident from the clarification which has been incorporated in the notification itself subsequently. When such is the intention of the legislation it is not proper to give interpretation otherwise contrary to the meaning of the notification by the Commissioner (A).
3. Ld AR Sh. Arun kumar reiterated the grounds of appeal.
4. On behalf of assessee/respondent, Ld. Advocate Sh. N. Viswanathan submitted that the issue stands covered by decision of Tribunal in the case of CCE, C & ST, Hyderabad Vs IVRCL [2009 (240) ELT 606 (Tri- Bang)] which has held as under:
5.?We have gone through the records of the case carefully. The point at issue in these appeals is whether the benefit of the notification should be restricted for pipes up to the first storage point only. A similar issue came before CESTAT, Kolkata in the case of CCE, Kolkata-III v. M/s. Electro Steel Castings Ltd. The Tribunal in the Order No. M-301-330/A-1119-1150/KOL/2008 [2009 (235) E.L.T. 757 (Tri.-Kolkata)] has held that the said exemption notification would be applicable to the pipes required even beyond the first storage point. The reasoning given by the Tribunal is reproduced below:
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 1-3-2007. 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 subsequent storage point, such as elevated storage reservoirs where the water was further treated for chlorination. If it was the intention of the government to restrict the exemption for pipes up to first storage point, the notification should have been accordingly worded from the beginning. In the absence of such a restriction, the respondents have executed the work order in respect of water treatment plants which are of public utilities and the concerned District Collectors have also given them the necessary certificates in respect of the exemption Notification as it was in its unamended form. Even after storage point. In other words, the amended notification also allows exemption to pipes which are used beyond the first storage point, but in respect of only higher dimension. As regards the ground of the Department that the communication issued by the Jurisdictional Superintendent should not be treated as an appellable order, we are unable to agree with the same. By issuing the said letters the Superintendent sought to deny exemption to the respondents by putting a restriction on the clearance of the pipes for the public utilities concerned. In fact, the Superintendent violated the instructions of the Department in not issuing a Show Cause notice and giving an opportunity of hearing to the respondents before passing a non-speaking order. In such a situation, where the Superintendent put a restriction on the clearance, the respondents had no option but to go to the lower Appellate Authority for Redressal of their grievance. Moreover, under Section 35 of the Central Excise Act, 1944, any person aggrieved by any decision or order passed under the Act by a Central Excise Officer lower in rank than the Commissioner can appeal to the Commissioner (Appeals). Since in the instant case, the Superintendent is a Central Excise Officer lower in rank than the Commissioner and he had communicated the decision/order not to effect clearance availing exemption, the respondents in this case were, inter alia, aggrieved by his decision/order so communicated and in our view, the lower Appellate Authority was right in entertaining the appeal against such communication.
9.?As regards the third ground taken by the Department that exemption Notification should have been strictly construed on the basis of the language used therein, and not on the basis of intendment by supplying words, we are of the view that it is the Department which has actually supplied the words first before the expression, storage facilities trying to deny the exemption whereas the Notification as interpreted on the basis of the language used therein, cannot restrict the exemption being extended to pipes used for delivering water up to subsequent storage points which are part of the water treatment project.
10.?In view of our findings as above, we hold that the impugned order passed by the lower Appellate Authority extending exemption to the respondents does not require any interference. Hence, we dismiss all the 30 appeals filed by the Department in addition to two extra appeals filed by the Department.
6.?We find that the issue before the Kolkata Bench was identical with the one before us. We are in agreement with the said decision. In our view, the exemption cannot be restricted to the first storage point. The Commissioner (Appeals) has rightly relied on the decision of the Kolkata Bench. In such circumstances, we do not find any merits in Revenues appeals. Therefore, the Revenues appeals are dismissed.
5. Ld. Counsel also submitted that the appeal against said decision filed by department was dismissed by Honble Apex Court as reported in 2016(336) ELT A134 (S.C.).
6. As the issue stands covered by the above judgment, we are of the considered opinion that the Commissioner (Appeals) was correct in holding that the appellant is eligible for benefit under the exemption notification. The order passed by Commissioner (Appeals) therefore does not call for any interference.
7. In the result, the appeal is dismissed.
(Operative part of this order was pronounced in court
on conclusion of the hearing)
(MADHU MOHAN DAMODHAR) (SULEKHA BEEVI C.S.)
MEMBER(TECHNICAL) MEMBER(JUDICIAL)
Jaya.
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