By TIOL News Service

NEW DELHI: JULY 30, 2014 : THE appellant is engaged in the manufacture of motor spirit, high speed diesel and liquid petroleum gas falling under Chapter Heading No. 2710 of the Central Excise Tariff, 1985. They have a valid registration, granting registration to their factory at village Agasod, Bina Distt. Sagar (M.P.). The appellant filed an application to amend their approved ground plan of Central Excise registration to include the pipeline laid down from Wadinar (Gujarat) state to the refinery at Bina (M.P.). As per the appellant, the pipelines laid down on various parts of the land and areas in India/used for the ground pipelines were forming of integral part of premises of the refineries.

Their request was turned down by the department and the assessee is in appeal before the CESTAT.

After hearing both sides, the Tribunal upheld the department's view by holding that:

In various judicial pronouncements, the factory premises and precincts have been interpreted to mean all building or complex with its surroundings where manufacturing activity is taking place. The transportation of the crude oil through the pipelines which travel through various States of India cannot be held to be a process integrally connected with the final manufacturing so as to include the same with the refinery functions. The Larger Bench of the Tribunal in the case of Vikas Industrial Gas Vs. CCE Allahabad 2002-TIOL-95-CESTAT-DEL-LB has held that pump used for delivering water from the reservoir through pipeline to factory located a K.M. away from the factory cannot be held to be as falling within the factory precinct nor the bringing water from reservoir to the factory located at a K.M. away constitutes part of the manufacturing process. The definition of factory covers the premises and precincts of factory and not the premises or precincts beyond the factory premises and a dam reservoir located away from the factory cannot be treated as within the factory premises. Similarly in the case of CCE, Coimbatore Vs. Southern Iron & Steel Co. 2000 (121) ELT 164 (Tribunal) it was held that a pump house located 15 Kms. Away from the assessees factory used for drawing and pumping of water cannot be treated as extension of the factory.

To allow the registration of the pipeline by holding the same to be a factory premises or precinct thereof would meant to allowing the road area used by transportation of the raw materials by a truck. There is no justification in the above prayer of the appellant

(See 2014-TIOL-1366-CESTAT-DEL)