By TIOL News Service

MUMBAI, JAN 07, 2017: THE appellant purchased Reverse Osmosis Plant and installed the same in their factory. As per the appellant, the plant purchased is allegedly exempted vide Notification No. 3/2004-CE dt. 8.1.2004. Since the supplier paid excise duty while clearing the said plant, the appellant claimed refund of the duty paid.

The refund claim was rejected by the original authority on the ground that the entire plant was supplied, therefore, the same is not covered under the goods exempted under the notification.

The Commissioner (Appeals) rejected the appeal and, therefore, the appellant is before the CESTAT.

The appellant submitted that all the items which are used for setting up of water supply plants are exempted under the notification. On a query raised by the Bench regarding unjust enrichment, the appellant further submitted that since the appellant is a buyer of the goods and the plant was used within the factory there is no question of passing of incidence of duty to any other person, therefore, the unjust enrichment is not applicable in the present case; that no dispute was raised by the lower authority on this aspect. Reliance is placed inter alia on the decision in Rochem Separation Systems (I) Pvt. Ltd. - 2009-TIOL-859-CESTAT-MUM.

The Bench extracted the referred notification 03/2004-CE and observed –

"4. …, we find that the goods is specified in the notification are very broad and wide which in our view, even plant is also covered. The whole objective of the notification is that all the goods which are required for setting up of water supply plant are exempted. In the present case there is no dispute that the plant itself is a water treatment plant for supply of treated water for the industrial use. As per the description of the goods given in the notification read with explanation, we have no doubt that the Reverse Osmosis Plant received by the appellant is clearly covered by the exemption notification. Therefore, it was not liable for any payment of duty, hence the duty paid on the same by the supplier is refundable. The case of the appellant is also supported by the judgment relied upon by the appellant. In the case of Rochem Separation Systems (I) Pvt. Ltd. (supra) this Tribunal has held that 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. If all the machineries that are required to set up a plant can get the benefit, no justification to deny the benefit to the plant itself. Therefore, the ratio of this judgment directly applies in the facts of the present case. We, therefore, set aside the impugned order and allow the appeal. The sanctioning authority has liberty to verify the issue of unjust enrichment…."

The appeal was allowed in the above terms.

(See 2017-TIOL-62-CESTAT-MUM)