Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Mahendra Engg. Works on 1 February, 1993
Equivalent citations: 1993ECR113(TRI.-DELHI), 1993(67)ELT134(TRI-DEL)
ORDER G.A. Brahma Deva, Member (J)
1. Appeals E/1248/92, E/1249/92, E/1250/92 and E/4052/90 are filed by the Department on the issue of availability of exemption in respect of stampings and laminations in terms of Notification No. 64/86, dated 10-2-1986 as amended, since the decision was not in favour of the Department as per the respective impugned orders. Similarly feeling aggrieved by the orders passed by the concerned Collectors (Appeals) on the very issue, M/s. Coimbatore Rajendra Industries and M/s. Precision Stamping are also filed appeals in 2689/92 & 3421/92. Hence all these matters are clubbed together and are being disposed of by this common order.
2. We have heard Shri V. Sridharan, learned Counsel for the parties and Department was duly represented by Shri S.K. Sharma, learned JDR.
3. Notification No. 64/86 as amended by Notification No. 236/86 is reproduced as under :
"MACHINERY, APPLIANCES AND IMPLEMENTS In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 64/86-Central Excises, dated the 10th February, 1986, namely :-
In the Table to the said notification, after SI. No. 15 and the entries relating thereto, the following SI. No. and entries shall be inserted, namely :-
(1) (2) (3) (4) (5)
"16. 84.13 Parts of power Nil If, -
driven pumps (i) the said parts are
primarily desi- used in the manufac-
gned for hand- ture of the said power
ling water, driven pumps; and
namely:- (ii) such use is else-
(a) Centrifugal where than in the fac-
pumps (hori- tory of production of
zontal or vertical the said parts, the pro-
pumps); cedure set out in
(b) Deep tube- Chapter X of the
well turbine Central Excise Rules,
pumps; 1944 is followed."
(c) Submersible
pumps;
(d) Axial flow
and mixed flow
vertical pumps.
(Notification No. 236/86-C.E., dt. 3-4-1986)"
4. Shri Sridharan arguing for the parties submitted that the conditions envisaged in the Notification are fulfilled and it is an admitted fact that these are parts of the parts of the power driven pumps, but exemption was denied on the ground that benefit of exemption under Notification is applicable to the parts of the power driven pumps but not to the parts of the parts of P.D. pumps. He said that Department erred in interpreting the Notification that exemption is applicable to the parts of the "pump" portion and not to other portion. He drew our attention to the observation made by the Collector (Appeals) in the impugned order-in-appeal No. 3421/92 which reads as under :-
"I observe that it grants inter alia exemption to "Parts of power driven pumps primarily designed for handling water, namely :- (a) Centrifugal pumps (horizontal or vertical pumps) (b) Deep tubewell turbine pump (c) Submersible pumps and (d) Axial flow and mixed flow vertical pumps." I find that the expression used is "Power driven pumps". In my view, the main emphasis is that the parts are to be of the "pump" portion and it applies to such pumps which are designed to be driven by power. No doubt, there are sets in which the pump portion and the power generating portion namely the electric motor are integrated into one like in a monoblock pump or they may be separate entities also but in both the situations there can be no dispute about the fact that stampings and laminations are evidently parts of rotor and stator which in turn are parts of the power generating unit. The rotor stator are not parts of "pump" portion."
5. He contended that notification has to be understood that exemption is applicable to all portion of P.D. pumps and not to some 'portion'. He said part of the part of P.D. machine is also a part of the P.D. machine and Chapter 83 has been mentioned as against SI. No. 16 of the Notification and Electrical Stampings and Laminations falling under heading 83.12. He also said that no other goods falling under Chapter 83 which could have been any application in the manufacture of power driven pumps other than stampings and laminations and notification becomes redundant to that extent if the exemption is denied on the item in question. In support of his contention that part of the part is also part of the main item, he referred to the following decisions :
5.1 In the case of Audio Vision Electronics v. Collector of Customs [1987 (31) ELT 796], it was held in para 5 of the said decision that the component of a component of the machine is also a component part of the machine.
5.2 It was held in the case of Collector of Central Excise v. M.P. (I) Ltd., [1990 (46) ELT 68] that hardware rings are input to the manufacture of cycle tyre and cycle tyre is a part of cycle while interpreting the Notification 24/65.
5.3 He also drew our attention to the observation made by the Bombay High Court in the case of Acme Mfg. Co. Ltd. [1990 (78) STC 79] while deciding the issue with reference to Bombay Sales Tax Act that, apparently we see no reason to hold that component part of a motor vehicle is not a component part of the motor vehicle.
6. While countering the arguments, Shri S.K. Sharma for the Revenue submitted that emphasis is on part of power driven pump as per the Notification and since exemption should be restricted to the parts of power driven pumps only. He said that the items in question are not parts of power driven pumps, but they are parts of the prime mover and parts of the prime mover are not eligible for exemption in view of the wordings of the notification. He said that the Tribunal has taken the view in the case of M/s. Saga Windel Engineers (P.) Ltd. v. Collector of Central Excise, Ahmedabad as per Order No. 159/1988-B1, dated 5-4-1988 that rotors and stators which went into the manufacture of mono-block pump sets which were classifiable under Tariff Item No. 30D as parts of electric motors. In view of this, stampings and laminations cannot be considered as parts of power-driven pumps to extend the benefit of exemption in terms of notifications. He also said that decisions cited by the other side are not applicable to the facts of this case.
7. In reply, Shri Sridharan submitted that the order of the Tribunal as per Order No. 159/1988-B1 was based upon the earlier decisions in deciding the issue of classification of the product under old tariff and issue with reference to exemption notification was not dealt with in those decisions. On the other hand with reference to the exemption notification 217/85-CE, dated 8-10-1985 as amended was considered by the Tribunal in the case of Tata Iron & Steel Co. Ltd. v. Collector of Central Excise, Calcutta as per Order No. 64 & 65/89-B1, dated 29-5-1989 while deciding the issue with reference to the benefit of exemption in respect of ball or roller bearings which were parts of the component parts. While allowing the said appeal, it was observed that :-
"From the words of the above notification, it is clear that to claim exemption - (i) the product has to fall under one of the entries under Chapter 84 or 85 of the Schedule to the CET Act; (ii) the product should be intended for use in manufacturing of diesel oil operated internal combustion engines; (iii) the product should be other than those which are excepted from the purview of the notification; and (iv) when the product is to be used elsewhere, the procedure set out in Chapter 10 of CE Rules is to be followed".
Since Notification 217/85 is similar to that of exemption Notification 64 of 1986 as amended, benefit of exemption should be extended to items in question which are parts of the part of power driven pumps. He said that since the beginning taking into consideration all the genesis of the Notification 64/86, in the Notification 29/69, dated 1-3-1969, it was clearly mentioned that electric motors, rotors or stators are used in the factory of production as component parts in the manufacture of power driven pumps.
8. We have carefully considered the arguments advanced on both sides and perused the records including citations. On going through the impugned orders in all these cases, we find that there is no dispute about the fact that these were used in the electric motors or in rotors or stators and in turn that was used as component part in the manufacture of power driven pumps. It is clear from the findings that these items are parts of the parts of power driven pumps and exemption was denied in the appeals filed by the parties on the ground that exemption was not applicable to the parts of the parts of power driven pumps. We are of the view that exemption cannot be denied on the ground that these were not parts of the power driven pumps. Furthermore, we do not find any distinction between parts and sub-parts in the aforesaid Notification. Under these circumstances, we do not find any justification in denying the benefit to the items in question since they are also parts of the 138 EXCISE LAW TIMES [ Vol. 67 power driven pumps. We are not convinced with the argument advanced by the Departmental Representative that exemption is applicable to the parts of the pump portion and not to other parts. We also take note of observation made by the Supreme Court in the case of M/s. Hemraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise & Customs, Surat and Others [1978 (2) ELT j 350], which is reproduced below :-
"It is well established that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. If the tax-payer is within the plain terms of an exemption he cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. In a Court of Law or Equality what the legislature intended to be done or not to be done can only be legitimately ascertained from that which it has chosen to enact either in express words or by reasonable or necessary implication."
9. In view of our foregoing conclusion, we hold that there is no justification for denying the benefit of exemption to the items in question in terms of Notification 64/86. With this view, all these appeals are disposed of in the above terms.