IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN TUESDAY, THE 30TH MARCH 2010 / 9TH CHAITHRA 1932 WP(C).No. 22828 of 2007(P) -------------------------- PETITIONER(S): --------------- K.O.JOSE, GOVT.CONTRACTOR, KELAKATH HOUSE, OLD MARTHOMA CHURCH ROAD, PERUMBAVOOR, ERNAKULAM DISTRICT. BY ADV. SRI.BABU JOSEPH KURUVATHAZHA SRI.K.I.SAGEER RESPONDENT(S): --------------- 1. KERALA WATER AUTHORITY, REP. BY ITS MANAGING DIRECTOR, JALABHAVAN, THIRUVANANTHAPURAM. 2. THE SUPERINTENDING ENGINEER, K.W.A., PUBLIC HEALTH CIRCLE, THRISSUR. 3. THE EXECUTIVE ENGINEER, K.W.A. P.H.DIVISION, THRISSUR. 4. UNION OF INDIA, REP. BY ITS CENTRAL EXCISE COMMISSIONER, CHENNAI, TAMILNADU. R1 TO R3 BY SRI.M.DINESH, SC, R4 BY SRI.TPM IBRAHIM KHAN, ASG. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 30/03/2010, ALONG WITH W.P(C).23248/07, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX IN WPC.22828/07 PETITIONER'S EXHIBITS: EXT.P1: TRUE COPY OF PROCEEDING NO.C2-31971/05 DATED 5.7.05 OF THE DISTRICT COLLECTOR, THRISSUR. EXT.P2: TRUE COPY OF CONDITION NO.19 OF THE ADDITIONAL SPECIAL CONDITIONS FOR SUPPLY AND LAYING OF CONTRACTS. EXT.P3: TRUE COPY OF THE ORDER NO.A4.320/05 DATED 15.5.07 OF THE 3RD RESPONDENT. EXT.P3(a): TRUE COPY OF THE ORDER NO.1/588/05 DATED 31.5.07 ISSUED ON BEHALF OF THE 2ND RESPONDENT. EXT.P4: TRUE COPY OF THE REPRESENTATION DATED 4.6.07 SUBMITTED BY THE PETITIONER BEFORE THE 3RD RESPONDENT WITH ITS COPY TO THE 2ND RESPONDENT. RESPONDENT'S EXHIBITS: EXT.R2: TRUE COPY OF THE PREVAILING MARKET RATES OF PIPES. EXT.R2(a): TRUE COPY OF THE REQUEST ADDRESSED TO THE DISTRICT COLLECTOR FOR EXEMPTION OF CENTRAL EXCISE DUTY. EXT.ER2(b): TRUE COPY OF THE ADDITIONAL SPECIAL CONDITIONS. /TRUE COPY/ THOTTATHIL B.RADHAKRISHNAN, J. ------------------------------------------- W.P(C).No.22828 & 23248 OF 2007 ------------------------------------------- Dated this the 30th day of March, 2010 JUDGMENT The Government of India granted exemption from payment of customs and central excise duties in respect of water treatment projects for supply of drinking water for human and animal consumption. The procedure adopted is that this benefit will go on appropriate sanction by the District Collector under whose jurisdiction the work is carried out. The works in question were carried out by the petitioners for the Kerala Water Authority and the District Collector has certified that the purchases involved for carrying out the said works are eligible for exemption from customs and central excise duties in terms of the above exemption. It is conceded by both sides that payment of duty is exempted. This obviously means that the eligibility for WPC.22828/07 & 23248/07 2 exemption, ultimately, is for the Kerala Water Authority. The contractors would get the benefit of that exemption only as an agent of the Water Authority while they make purchases for carrying out the project in question. Therefore, a contractor will become eligible to enjoy exemption only when he quotes a rate including duty and then claims exemption from payment of duty. This is the contention of the Kerala Water Authority. In the case in hand, Water Authority would state that the rates including duty were not quoted by showing the duty component separately and therefore, the contractors were not eligible to the benefit of exemption to be passed on to them from the Water Authority. On the basis of the certification of the District Collector, it is beyond doubt that the materials have been utilised for a scheme to which exemption applies. The question is as to who would be eligible for the benefit of such exemption. This is purely a matter relating to enjoyment of an exemption. It is appropriate that the Commissioner of Central Excise having jurisdiction over the area decides the issue after hearing the Water Authority and WPC.22828/07 & 23248/07 3 the petitioners in these writ petitions. Let a decision in this regard be taken at the earliest if the petitioners make appropriate representations to the Commissioner of Excise and submit a copy of this judgment. Let final decision be taken within a period of six months. Status quo obtained as on today regarding recovery proceedings will govern the parties till the Commissioner of Excise decides the issue. These writ petitions are ordered accordingly. Sd/- THOTTATHIL B.RADHAKRISHNAN, Judge. kkb.19/04.