Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Customs And Central ... vs Tata Engineering And Locomotive ... on 15 June, 2001
Equivalent citations: 2002(148)ELT691(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. The question for consideration in this appeal is whether the material handling equipment manufactured by the respondent in its factory and used captively therein for manufacture of the excisable goods would be entitled to the benefit of exemption contained in notification 217/86. The notification exempts inputs manufactured in a factory and used in that factory or any other factory of the same manufacturer for manufacturing goods which are liable to duty.
2. It is not disputed that but for the provisions of clause (1) of the explanation to the notification, these goods are inputs. Clause (1) excludes from the scope of inputs machines, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing any goods, or for bringing out any change in any substance in or in relation to the manufacture of the final products. The Assistant Commissioner has denied the exemption in view of this clause, saying that the goods were not so used. On appeal from this order the Commissioner (Appeals), following the ratio of the decision of this Tribunal in Telco Vs. CCE 1994 (70) ELT 75 and held that the exemption was available. Hence this appeal by the department.
3. The Scope of the explanation contained in clause (1) of the explanation was considered in detail by the larger bench of this Tribunal in Jawahar Mills Vs. CCE 1999 (108) 47. The larger bench has held that not withstanding the absence of an immediate nexus between the use of these machines and the emergences of the final products, these goods would be capital goods. The ratio of the decision therefore would apply in considering the explanation to this notification. They are therefore have to be held to be used for producing or processing of any goods or bringing out any change in any substance in or in relation to the manufacture of the final products. Hence they would therefore fall within the scope of exclusion of clause (1) in the explanation to the notification. This is in fact what has been done in the larger bench decision in CCE Vs. Surya Roshni Limited 2001 (128) ELT 293. It would thus follow that the decision relied upon by the Commissioner (Appeals) is no longer good law and the benefit of the notification would not be available.
4. The appeal is accordingly allowed, the impugned order set aside and the Assistant Commissioner's order restored.