Customs, Excise and Gold Tribunal - Delhi
Kirloskar Brothers Ltd. vs Collector Of Central Excise on 24 October, 2000
Equivalent citations: 2001(127)ELT139(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. The short point for determination in this appeal is whether the goods described as Love-Joy Coupling are parts of power driven pumps sets and not power driven pumps as stipulated under Notification No. 64/86 and whether the duty amounting to Rs. 13,214/-confirmed against the appellant is sustainable in law. The Collector (Appeals) rejected the appeal of the assessee holding that there is clear distinction between pump set and pump and that since function of Love-Joy Coupling is only to couple the pump with electric motor, it cannot be said to be a part of power driven pump.
2. The facts of the case briefly stated are that the appellants are engaged in the manufacture of liquid pumps and power driven pumps. The liquid pumps are used for handling water and couple the said liquid pumps to a prime mover such as electric motor or diesel pumps with a shaft coupling known as Love-Joy Coupling. The appellant claimed the benefit of Notification No. 64/86 dated 10-2-86 which exempts the parts of power driven pumps falling under chapter 82, 83 or 84. The appellant got L-6 licence and C.T. 2 certificate for receiving these Love-Joy Couplings in terms of the requirement of notification. A SCN was issued to the appellant alleging that the Love-Joy Couplings are parts of power driven pump sets and not part of power driven pumps as stipulated under Notification No. 64/86. The Asstt. Collector observed that the Love-Joy Coupling is a part of the motor components rather than mere pump and hence the exemption of Notification No. 64/86 is not applicable. Against this, the appellant filed an appeal before the Collector (Appeals) who held as indicated above.
3. Shri Rajesh Kumar, ld. Advocate along with Shri Adkar Makrand, ld. Advocate submits that the Collector (Appeals) made artificial distance between power driven pumps and power driven pump sets. He submits that Notification No. 64/86 refers to power driven pumps and not to power driven pump sets. He submits that the terminology of 'power driven pump sets' was used by the department in the SCN. In reply to the SCN, he submits that the power driven pump sets mentioned in the SCN are nothing but the power driven pumps. He submits that the chapter heading 84.13 refers to pumps for liquids whether or not fitted with measuring device; that the Govt. of India in the Tariff Advice No. 14/3/81-CX 6, dated 10-11-1981 clarified that there must be an external source of power to drive the pump; that the power driven pump is a pump which gets the drive from external source of power like electric motor or I.C. Engine; that since the power driven pumps for liquid are driven by external source of power, they are correctly classifiable under Item No. 30A of the erstwhile Central Excise Tariff; that this item is now covered by Chapter heading 84.13. Ld. Counsel submits that the Asstt. Collector had held that the Love-Joy Coupling is a part of electric motor falling under chapter 85 and not a part of power driven pump; that the Asstt. Collector's findings were contrary to the contents of the SCN; that thus, the Asstt. Collector had travelled beyond the scope of SCN. Ld. Advocate submits that the findings of the Collector that the demand can always be issued under Section 11A read with Rule 192 when the exemption was wrongly availed, is contrary to the provisions of Chapter X; that Chapter X is a self-contained code and provides for recovery of duty under Rule 196 of the Rules and no further; that there was no breach of provisions of Rule 196 and that the duty cannot be demanded under Section 11A read with Rule 192. Ld. Counsel submits that this Tribunal in their own case by its Final Order No. E/642-43/97-B dated 22-4-97 while deciding the issue of classification of the pump sets where the pump portion and the prime mover held that - the electric motor were mounted and attached on the same base plate and were coupled to each other, the pump coupled with electric motors was rightly classifiable under Item 30A of the erstwhile Central Excise Tariff. Ld. Counsel also submits that the CBEC by its circular No. 224/58/96-CX dated 26-6-96, in para 2 clarified that "The matter has been examined in depth, Board in its F. No. 151/13/92-CX 4 (Pt) Circular No. 11/11/94 dated 2-2-94) has held electric motors or rotors or stators are component parts of P.D. Pumps. Following the same analogy, the prime mover, i.e. I.C. Engine may be treated as an integral part of P.G. Pump. The Board takes note of Note 3 of Section XVI of Central Excise Tariff which states that composite machines consisting of two or more machines fitted together to form a whole and'other machines adapted for the purpose of performing two or more complimentary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function. As the principal function of a pump set is that of the pump, the pump set is rightly classifiable under chapter heading 84.13." He, therefore, prays that the appeal may be allowed.
4. Shri S.N. Singh, ld. SDR reiterates the findings of the lower authorities.
5. We have heard the rival submissions. We have also perused the case law as also the clarification of the CBEC. On careful consideration of these documents, case law and the evidence on records, we find that the CBEC have clearly clarified that principal function of the pump set is that of pump, the pump set is rightly classifiable under chapter heading 84.13. It is also well settled law that the department is prevented from arguing against the clarifications issued by the CBEC. Since the position has been clarified by the CBEC, we agree with the clarification. We, therefore held that the power driven pump sets manufactured by the appellant are classifiable under chapter heading 84.13 and will be eligible for the benefit of Notification No. 64/86. In this view of the matter, the appeal is allowed. Consequential relief, if any shall be admissible to the appellant in accordance with law.