Circular No 891/11/09-CX
F.No. 167/38/ 2007-CX.4
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Custom
New Delhi, the 15th June 2009
All the Chief Commissioner of Central Excise,
All the Chief Commissioner of Customs
All the Director General
Subject: Eligibility of exemption Notification No 6/2006_CE to pipe fittings ( joints, sleeves, elbow, couplings, etc. ) -reg
It has been brought to the notice of the Board that the manufacturers of pipe fittings (joints, sleeves, elbow, couplings, etc.) are claiming the benefit of the Sl No. 7 of the Notification No. 6/06-CE. It is also reported that some units are manufacturing pipes and pipe fittings and claiming benefit of notification for pipe fittings which are cleared alongwith pipes. The issue is whether the ‘pipe fittings’ in the water supply network are also exempted.
2.0 The matter has been examined. It has been argued that in view of decision of the Supreme Court in case of M/s Bharat Forge, the pipe and pipe fittings should be considered same. Therefore, the benefit of the notification No 6/2006-CE would also be available to pipe fittings. However, a careful reading of the said judgment revealed that it was delivered in the context of item No 26AA(iv) of the erstwhile Tariff, and in the said judgment, it was also observed that as the entries in the erstwhile Tariff and present Tariff are different, the entries in the present tariff cannot be used to interpret the entries in the old tariff. Therefore, the said judgment is not applicable to the present Tariff, where pipes and pipe fittings are classified under different Tariff items.
3.0 Secondly, the intention behind the notification is to provide exemption only to pipes as understood in the common parlance and not to fittings which is a separate commodity and known differently in the market.
4.0 Further, even though the tariff heading in which the pipes fall is not specified in the notification but they are covered under the description given in the notification in column 3. The description only specifies ‘Pipes needed…’. There is no mention of any pipe fittings. Further, pipe fittings are a separate commodity and cannot be subsumed under the generic terms ‘Pipes’. A glance at the Tariff shows that the pipe fittings are classified separately from pipes. This clearly implies that the two commodities are different. Even the HSN classifies them separately.
5.0 Therefore, Board is of the view that exemption at Sl No. 7 of the Notification No. 6/06-CE is not available to ‘pipe fittings’ used in the pipe network for supply of drinking water.
6.0 Trade & industry as well as field formations may please be informed suitably.
7.0 Receipt of this order may please be acknowledged.
8.0 Hindi version will follow.