ORDER
S.L. Peeran, Member (J)
1. This is a Revenue appeal against OIA No. 94/2000-CE. The finding recorded by the Commissioner (Appeals) in paras 4 to 9 is reproduced herein below.
4. I have gone through the case records and submission made by the appellants including those urged at the time of personal hearing. The issue involved in the instant appeal is regarding the clearances of HDPE Pipes without payment of duty.
5. The appellants submitted that the subject goods were exclusively for use as component in the drip/sprinkler irrigation system. This is evident from not only the fact that the goods in question were supplied to M/s. Rungta Irrigation Ltd. for filment into the irrigation equipment but also from the depositions dated 10.11.1997 of Mr. Brahmanandam and dated 29.9.1997 of Mr. Bardia (of M/s. Rungta). The appellants also submitted that such HDPE Pipes were classifiable under C.S.H. 8424.91. In this regard they quoted the decisions:
a. 2000 (89) ECR 593 (T)
b.
c. 2001 (94) ECR 21 (T)
6. I have carefully examined the issue and observed that Shri T. Brahmanandam, Managing Director of M/s. Haritha Irrigation Products (P) Ltd. in his statement dated 10.11.1997 deposed that “I am also to submit you that these pipes were used by M/s. Rungta Irrigation Ltd. for their sprinkler irrigation system and I was told by them that sprinkler irrigation system is exempted form duty.” I have also observed that Shri B.K. Bardia, Assistant General Manager Finance of M/s. Rungta Irrigation Ltd. in his statement dated 29.9.1997 deposed that “In respect of HDPE Pipes, we purchase from the manufacturers and sometimes, we also send granules for job work and we pay them the conversion charges. On your specific questions, we have to inform you that one such supplier of HDPE pipes is M/s. Haritha Irrigation Products Pvt. Ltd. Cheriapally, Hyderabad. We supply HDPE granules to them and they manufacture HDPE Pipes in the sizes of 75mm, 63mm & 90mm and supply to us. We use those HDPE pipes for assembly of RUNGTA Irrigation Systems and then clear them to our customers. Since irrigation systems are exempted from the payment of central excise duty, we do not pay any duty on these sprinkler irrigation systems. We never clear HDPE pipes separately to our customers. We only clear irrigation systems after availing the exemption under central excise. I am to specifically inform you that with M/s. Haritha Irrigation Products Pvt. Ltd. we have an agreement for job work and we pay them Rs. 11.50 ps. as conversion charges on per kg. of HDPE pipes supplied by them. We have not paid any central excise duty on these pipes since our sprinkler systems are exempted from the payment of duty.
7. From the above findings it is clear that the HDPE Pipes cleared by the appellants to M/s. Rungta Irrigation Ltd. were used for drip/sprinkler irrigation systems only. In this regard observed that the Hon’ble CEGAT of South Zonal Bench in the case of Flow Tech Power v. CCE, Coimbatore reported in 2001 (94) ECR 21 (Trib) held that “Classification–Plastic Pipes HDPE/LDPE/LLDPE Pipes for Drip Irrigation System Viz., CETA H: 84.24 and are entitled to in the case of Elgi Ultra Application Ltd. v. CCE 2000 (89) ECR 593 (T) is fully applicable in the present case more so as revenue’s appeal against this decision has been dismissed by the Supreme Court. Demand not sustainable. Revenue plea for reference to Larger Bench rejected since issue already settled.
8. The Hon’ble CEGAT in the ease of Hallmark Industries v. CCE, Calcutta-I held that “HOPE Pipes and plastic parts, specially designed to work exclusively with sprinkler irrigation system, classifiable under sub-heading 8424.00 of Central Excise Tariff Act, 1985 read with exemption Notification No. 46/94-CE and not as general purpose plastic pipes under Heading 39.17–Appeal allowed.
9. Following the ratio of the above decisions I held that appellants are eligible for the exemption under Chapter Sub Heading 8424.91. Since no duty is payable by the appellants imposition of penalty under Section 11AC of Central Excise Act, 1944 and Central Excise Rules not warranted. Accordingly I pass the following order.
Learned DR submits that HDPE pipes cleared by the appellants are general purpose pipes and they are not irrigation pipes for the purpose of granting the benefit. It is his submission that the classification of goods is to be decided on the basis of their condition at the time of clearance and not on the basis of subsequent use. He produced copies of the notices to prove that they are cleared as pipes as such which are for general purpose and have no specific purpose of dip irrigation. Earned Counsel submits that there is no evidence to support the revenue’s pleas. They are not specially designed and meant only for dip irrigation. Therefore the judgments relied by the Commissioner in the impugned order are fully applicable to the facts of the case. He submits that the Tribunal’s Ruling rendered in the case of Elgi Ultra Appliances Ltd. v. CCE Coimbatore has been approved by the Apex Court as .
2. On a careful consideration, we notice that all the points raised by the revenue have been dealt with in the judgments rendered by the Tribunal in the case of Elgi Ultra Appliances Ltd and in the case of Flow Tech Power v. CCE Coimbatore . The Judgment in the case of Elgi Ultra Appliances has already been approved by the Apex Court. We further find that the Eastern Bench in the case of Hallmark industries v. CCE Calcutta has also noted that the HDPE pipes does not work successfully with Sprinkler irrigation and they are rightly classifiable under sub-heading 8424.00 of Central Excise Tariff Act read with exemption Notification 46/94 CE and not as general purpose plastic pipes under heading 39.17. We find likewise that the Delhi Bench in the case of CCE Ghaziabad v. Rungta Irrigation Ltd. has taken a similar view and has applied the ratio of the Judgment noted {supra). The similar view was expressed by the Delhi Bench in the case of CCE Ghaziabad v. Rungta Irrigation Ltd. . We find that all the grounds of appeal have already been answered by the Tribunal. We do not find any merit in this Revenue appeal and the same is rejected.
(Pronounced and dictated in open Court)