By TIOL News Service

MUMBAI, FEB 07, 2013: TAKE a look at the following Tariff entry -

8413 70 - Other centrifugal pumps:

8413 70 10 --- Primarily designed to handle water

The Notification 10/2006-CE dated 01.03.2006 inter alia provided the following exemption:-

The applicants engaged in the manufacture of power driven pumps were clearing a “set of pumps” by describing the same as “pressure booster system” and by classifying the same under sub-heading 8413 70 10 of the Central Excise Tariff and claiming the benefit of Notification 10/2006-CE as above.

Revenue sought to deny the exemption on the ground that the applicants are clearing the pressure booster system which consists of more than one pump and the product in question is assembled to electric motors, shaft, ball bearing, casing, impeller etc. Inasmuch as since the product viz. pressure booster system consists of power driven pumps, control panel, water tanks, cable, switches, the same could not be considered as a power driven pump, is the Revenue contention. The proceedings lead to confirmation of a demand of Rs.68,44,267/-along with imposition of interest and penalty by the CCE, Kolhapur .

Before the CESTAT the appellant submitted as under -

++ They are manufacturing the pressure boosting system which is consisting of more than one centrifugal pump and the same is used for lifting the water.

++ They are classifying the product in question under Heading 8413 70 10 which specifically covers pumps primarily designed for handling water.

++ Since Revenue is not disputing the classification, the benefit of the notification cannot be denied to the applicants on the ground that the product in question is not power driven pumps primarily designed for handling water.

The Revenue representative reiterated the findings of the adjudicating authority and submitted that the power driven pump is input for manufacture of the pressure boosting system and, therefore, it cannot be said that pressure boosting system is simply power driven pumps and as such, the demand was rightly made.

The Bench observed -

“8. We have gone through the provisions of the notification as well as the Central Excise Tariff classification. The applicants are claiming classification under Heading 84137010 which covers power driven pump primarily designed for handling water. As the classification is not disputed by the Revenue, therefore, prima facie the applicants have made out a strong case for waiver of pre-deposit of the dues. Pre-deposit of the dues is therefore waived and recovery thereof stayed for hearing of the appeal.”

In fine, the Stay petition was allowed.

(See 2013-TIOL-234-CESTAT-MUM )