Customs, Excise and Gold Tribunal - Delhi
Dura-Metallic (India) Ltd. vs Collector Of Central Excise on 1 November, 1996
Equivalent citations: 1997(89)ELT778(TRI-DEL)
ORDER A.C.C. Unni, Member (J)
1. This is an appeal against the order of the Collector of Central Excise (Appeals), Madras dated 16-11-1987 by which the Collector (Appeals) had held that mechanical seals manufactured by the appellants are not eligible for exemption under Notification No. 155/86. He accordingly, upheld the order of the Assistant Collector.
2. The point needing determination is whether mechanical seals which are admittedly parts or components of power driven pumps would be entitled to exemption under Notification No. 155/86. There is no dispute as to the classification of the product as coming under Tariff Heading 8413.00. For this, reliance has been placed on Section Note 2(b) to Section XVI84 which reads as under :-
"Other parts, if suitable for use solely or principally with a particular kind of machine or with a number of machines of the same heading (including a machine of heading No. 84.79 or heading No. 85.43) are to be classifiable with a machine of that kind."
The Assistant Collector had found that, though, mechanical pumps manufactured and cleared by appellants under Tariff Heading 8413.00 was correctly allowed, for claiming the concessional rate of duty for mechanical seals, "parts" of such pumps could not be included since it is not described as such in Col. 3 of the Notification. While confirming the order of the Assistant Collector the Collector (Appeals) observed that the exemption under the Notification is for the goods described in Column No. 3. The exemption specifically mentioned the description of the goods apart from the specific sub-heading. Since only power driven pumps primarily designed for handling water and not "parts" thereof are covered by the exemption Notification appellants were not entitled for the benefit of the exemption, though, the pumps themselves would be classifiable under Heading 8413.00 and eligible for the exemption.
3. The appellants' case is that mechanical seals manufactured by them are principally m0ant for use in power driven pumps and as per Note 2(b) of Section XVI of the Schedule to the Central Excise Tariff Act, 1985 such parts, if suitable for use solely or principally with a particular type of machine, are to be classified with a machine of that kind and since mechanical seals which are suitable for use solely or principally with power driven pumps they are to be classified under the same heading as power driven pumps. They also contended that the benefit of exemption Notification No. 155/86 should be extended to components of power driven pumps also so long as they are not specifically excluded by the tariff or from the Notification.
4. Appearing for the respondents Revenue Shri P.K. Jain, Id. SDR, has stated that it is a settled principle of interpretation that exemption Notifications should be construed strictly and the benefit of the exemption can be claimed only to the product specifically mentioned in such exemption notification and there was no scope for extending the benefit with reference to Chapter Note given in the CETA. He has relied on the decision rendered in the case of Guest Keen Williams v. Collector of Customs -1986 (29) E.L.T. 68 wherein the Tribunal had held that where the language of exemption notification is clear any litteral interpretation which would give unintended benefit to the appellants is not justified. The Tribunal has also held that the Rules of Interpretation and Section Notes contained in the Schedule of the Customs Tariff Act, 1975 cannot be extended to the interpretation of exemption notification. He has further relied upon the decision cited in 1990 (42) E.L.T. 235 wherein the Tribunal had observed that Rule 2(a) of the interpretation rules of Customs Tariff Act for purposes of Chapter 16 of the said Act cannot be accepted for the purposes of interpreting a notification as the said rules of interpretation were meant for interpreting the chapters of the Act and not exemption notifications.
5. We have considered the submissions made on behalf of the parties. On the question of classification of the product there is no dispute. The dispute is in relation to the eligibility of "component parts" of the exempted items. The relevant Notification No. 155/86 reads as under :-
"Effective rates of duty for certain goods falling under Chapter 84. - In exercise of the powers conferred by Sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts the goods specified in column (3) of the Table hereto 'annexed' and falling under Heading or sub-heading No. of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) specified in the corresponding entries in column (2) of the table, from so much of the duty of excise leviable thereon which is specified in the said Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table.
TABLE
______________________________________________________________
SI. Heading Description of goods Rate
No. No. or sub-
heading
No. of the
Schedule to
the Central
Excise
Tariff Act,
1985
______________________________________________________________
(1) (2) (3) (4)
1. 84.13 (i) Power driven pumps Nil
primarily designed
for handling water,
namely:-
(a) Centrifugal pumps
(horizontal or vertical
pumps);
(b) Deep tube-well turbine
pumps;
(c) Submersible pumps;
(d) Axial flow and mixed
flow vertical pumps.
(ii) Other power driven pumps Ten per cent
2. 84.18.00 Heat Pumps ad valorem
3. 8419.00 Goods other than refrigerating and Fifteen per cent
air-conditioning machinery and ad valorem
parts thereof
4. 8421.00 (i) Goods other than the Fifteen per cent
following, namely :- ad valorem
(a) filter elements, inserts
and cartridges for
internal combustion
engines;
(b) water filters of a capacity
not exceeding 40 litres;
(ii) Water filters of a capacity not Nil
exceeding 40 litres;
5. 84.22 (i) Goods other than dish Fifteen per cent
washing machines ad valorem
(ii) Dish washing machines Twenty per cent
ad valorem
(iii) Parts of goods falling Twenty per cent
under heading No. 84.22 ad valorem
6. 85.50 Household of laundry type washing Twenty per cent
machines, including machines, ad valorem
which both wash and dry, and parts
thereof.
7. 84.69 Manual typewriters -
(i) of carriage size not exceeding Rs. 300 per type-
25 centimeters and weight
with case not exceeding 7
kilograms,
(ii) of carriage size exceeding 25 Rs. 700 per type-
centimeters but not exceeding
30 centimeters
(iii) of carriage size exceeding 30 Rs. 800 per type-
centimeters but not exceeding
40 centimeters,
(iv) of carriage size exceeding 40 Rs. 1000 per type-
centimeters but not exceeding
55 centimeters.
(v) Others Rs. 1400 per type-
writer
8. 84.69 Typewriters other than manual type- Twenty per cent ad
writers valorem
9. 84.69 Word processing machines Twenty per cent ad
valorem
[Notification No. 155/86-C.E., dated 1-3-1986 as amended by Notifications No. 277/86-C.E., dated 24-4-1986 and No. 365/86-C.E., dated 29-7- 1986.]
6. It will be seen from Serial No. 1 relating to Heading 84.13 and Table to the Notification which refers to description of goods, there is no mention of any "component part" of power driven pumps. On the other hand, it would be observed that against Sl. No. 5 relating to Heading 84.22 there is a specific mention of "parts" under sub-item (iii) of Column (3). It will be obvious from this that while granting exemption for "power driven pumps" the Central Government had no intention to include "parts" of power driven pumps for the concessional rate of duty allowed under the Notification.
7. In view of the above, we find no infirmity in the impugned order. The appeal is without merit. We, therefore, have no hesitation in rejecting the present appeal. Ordered accordingly.