The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai Bench, has quashed excise duty demands and penalties raised by the Goa Commissionerate, holding that Domestic Tariff Area (DTA) clearances made by a 100% Export Oriented Unit (EOU) were eligible for concessional excise duty under Notification Nos. 23/2003-CEand 12/2012-CE.
The Bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) has observed that all the products manufactured and cleared were used for water filtration and purification, satisfying the “similar goods” condition under Para 6.8(a) of the Foreign Trade Policy (FTP 2009–14).
The dispute arose from departmental demands covering the period 2008–2015, alleging that the EOU misused duty concessions by clearing goods in the DTA which were not “similar” to exported items. The Revenue also sought to reclassify the goods under CTI 8421 9900 (parts) instead of CTI 8421 2190 (filtering or purifying machinery for water), leading to higher duty liability.
The Commissioner of Central Excise, Goa, had confirmed part of the demand through two separate orders, prompting appeals before the Tribunal. The Revenue also filed an appeal seeking penalties and confirmation of dropped demands.
The Tribunal held that filtration and purification systems such as RO systems, UV systems, and filter assemblies are complete machines, not mere parts. Hence, they fall under CTI 8421 2190, which covers “filtering or purifying machinery and apparatus for water”. The Bench rejected the Department’s reclassification under “parts” (CTI 8421 9900).
It emphasized that the Development Commissioner, who had renewed the unit’s Letter of Permission multiple times, had raised no objection to DTA clearances—confirming compliance with FTP.
Since the company regularly filed returns and underwent departmental and audit reviews, there was no suppression or misrepresentation. The invocation of the extended period of limitation was therefore unjustified.
Citing the Delhi High Court’s ruling in Greatship (India) Ltd., the Tribunal observed that in cases of conflict, the Ministry of Commerce (Development Commissioner) has the final say in FTP interpretation—not the Revenue Department.
The Bench concluded that the DTA clearances were lawfully made, the concessional duty was rightly availed, and the goods were properly classified.
“The impugned orders confirming the duty demands and penalties are not legally sustainable. The Revenue’s appeal for re-determination of duty and penalty is dismissed,” the order stated.
Case Details
Case Title: Pentair Water India Private Limited Versus Commissioner of Central Excise & Service Tax
Case No.: Excise Appeal No. 86002 Of 2015
Date: 23.10.2025
Counsel For Appellant: Hemant Kumar Tantia, Authorized Representative
Counsel For Respondent: T. Vishwanathan a/w Shri Akhilesh Kangsia & Ms. Madhura Khandekar, Advocates
