Customs, Excise and Gold Tribunal - Tamil Nadu
Wheels India Ltd. vs Commissioner Of Central Excise on 22 September, 2000
Equivalent citations: 2000(122)ELT875(TRI-CHENNAI)
ORDER S.S. Sekhon, Member (T)
1. The present appeal has been filed against confirmation of duty demand of Rs. 2,391/- (BED) and Rs. 239/-(SED) in respect of spot welding electrodes consumed during the period 18.09.1991 to 29.02.1992. The appellants used this spot welding electrodes, falling under Heading 8311.00, manufactured by them and captively used, for soldering the wheels being manufactured by them in their factory, and claimed the benefit of Notification No. 217/86, dated 02.04.1986 after making necessary declarations.
2. The Collector (Appeals) after finding the stated use to be as follows ;
"The electrodes are used in pairs, top and bottom. These electrodes are mounted on the Spot Welding Machine for spot welding of the wheels. The wheel to be welded is held between the top and bottom electrodes. When electricity is conducted through the top electrodes to the bottom electrode the wheel held in between the elctrodes gets welded."
held that the impugned elctrodes used in the manufacture of wheels were in the nature of 'tools/appliances fitted with the welding machine' and therefore, they would be excluded by the explanation 1 to Notificaiton No. 217/86, dated 02.04.1986. The Collector (Appeals) approved the findings of the Assistant Collector to the effect that the impugned inputs were not eligible to the benefit of Modvat credit under Rule 57A as this Rule and the Notification No. 217/86 were pari materia as regards the coverage of the input and the benefit of the Notification would not be available to the impugned goods and therefore confirmed the Assistant Collector's order and rejected the appeal of the manufacturers.
3. The appellants were heard when learned Counsel Shri R. Ragha-van, appeared and submitted that without the spot welding electrodes it was not possible to manufacture the wheels and these electrodes would be eligible for the exemption under Notification No. 217/86. He relied upon the Larger Bench decision in the case of Union Carbide as reported in 1996 (86) E.L.T. 613 and submitted that these electrodes are parts of spot welding machines and are held to be eligible as inputs and would be eligible to qualify as inputs as per this decision of the Larger Bench. He also cited the decision of the West Regional Bench in the case of Bajaj Auto Ltd. v. CCE, Pune as reported in 1998 (99) E.L.T. 479 and submitted that once these impugned goods are admitted to be eligible inputs, then they would be entitled to the benefit of Notification No. 217/86.
4. The learned DR on the other hand reiterated the findings of the Collector (Appeals).
5. We have considered the rival submissions and the material on record and the decision relied upon by the learned Counsel Shri R. Raghavan. After considering the same, we find that -
(a) When the statutes are pari materia, they relate to the same person or thing or to same class of persons or things. Therefore, when the Collector (Appeals) is holding that the definition under Rule 57A for the inputs, and the Notification 217/86 to be pari materia, the items which are considered to be eligible inputs would be eligible for the benefit of this Notification. We have therefore to find out whether spot welding electrodes are elgibile as inputs under Rule 57A.
(b) Proceeding to determine the nature of spot welding electrodes, our research revealed that in the case of Bajaj Tempo Ltd. v. CCE, Indore as reported in 1996 (86) E.L.T. 590 (Tribunal) the use and the brief process as to how these electrodes are used and are different from the other electrodes, the Tribunal has recorded as follows:
"Spot Welding Electrodes. These electrodes are used for spot welding. This is briefly a process in which electricity is pass through electrodes and converted into heat by the resistance provided by the surface to be welded. The material contained in the spot welding electrodes is not transferred to the surface to be welded and therefore does not form part of the finished goods. This is a reason why the rate of consumption of these electrodes is such slower than that of the other electrodes. The fact that electrodes have to be rotated is not by itslelf a reason for allowing the credit. I decline to interfere."
In the case of Bajaj Auto Ltd. v. CCE, Pune as reported in 1998 (99) E.L.T. 479 (Tribunal), the same learned Member after considering the decision in the case of Union Carbide, 1996 (86) E.L.T. 613, in regard to the nature and use of welding electrodes has held that the items are eligible inputs, in para 3 of his order as follows:
"The departmental representative agrees that in terms of the Order No. 2188-95/95-WRB passed in TELCO Ltd. v. CCE (unreported), it has been held that spot welding electrodes are considered to be inputs. The reasoning for the Bench was that such electrodes are no different from arc electrodes which the department itself has held, to be inputs. Even independently of this decision, the electrodes would merit to be considered as inputs. It is not in dispute that for the electrodes to perform the task of welding it has to be part of the welding machine to which they are fixed and to which they receive electric current, and which the electrodes convert to heat, thereby providing the temperature of heat for welding. They would therefore be part of machines or machinery. It is only the complete machines which are covered by the exclusion clause in the Explanation to Rule 57A. Parts of machines, machinery etc. would not be covered by the exclusion clause as held in Tribunal's decision in Union Carbide v. CCE. The goods would have to be held to be inputs on this score also."
From the above, and the decision of the Larger Bench in the case of Union Carbide, it would be apparent that once it is found that spot welding electrodes are in the nature of parts of machinery, then they would be eligible for the benefit under Rule 57A and also under Notification 217/86.
(c) The Collector (Appeals) in the present case has held the goods to be in the nature of tools/appliances fitted with welding machine while the learned Counsel for the appellants and in the appeal, no material has been placed as to how the findings are not correct. The Collector (Appeals) has come to these findings from the stated use incorporated in para 2 (supra). Examining the definition of the words "tools/appliances" which were considered in the Union Carbide decision, we find the definition to be as follows "McGraw-Hill Dictionary of Scientific and Technical Terms, IV Edition :
Appliance : A piece of equipment that draws electric or other energy and produces a desired work-saving or other result.
Tool : Any device, instrument or machine for the performance of an operation.
Academic Press Dictionary of Science and Technology :
Appliance : In general, any tool or machine that is used to carry out a specific task or produce a desired result.
Tool : A portable and usually hard-held instrument that used to increase the efficiency of a work effort.
Words and Phrases, Permanent Edition - Vol 7A :
Appliance : is generally considered to be any house hold or office utensil, apparatus or instrument or machine that utilizes a power supply, especially electric current e.g. vacuum cleaners, refrigeration, toaster, air-conditioner.
Tool : An instrument of manual operation, like a human saw, plane, file or the like used to facilitate mechanical operations, as distinguished from an appliance moved by and regulated by machinery.
6. The learned Member who earlier had occasion to examine the use of spot welding electrodes before the Union Carbide decision did not consider the spot welding machine to be eligible for credit without considering whether they would be parts of machinery or not, while in the order in the case of Bajaj Auto Ltd., 1998 (99) E.L.T. 479, after considering the Larger Bench decision in the case of Union Carbide and the un-reported decision in the case of TELCO Ltd. on the same items, he came independently to a decision that the said electrodes have to be parts of welding machine and therefore relying upon the decision in the case of Union Carbide, he considered them to be eligible input for the benefit under Rule 57A. We, find no reason to disagree with the findings of the learned Member as arrived at in the case of Bajaj Auto Ltd. [1998 (99) E.L.T. 479 (Tribunal)] to hold these items to be parts, especially when we find that the Collector (Appeals) in the order has not given any reason as to how the items should be considered as tools appliances and considering the definition of Tools/Appliances (supra). Therefore, once the items are considered as parts, the spot welding electrodes therefore evidently are essential parts of the machinery and would be eligible for Modvat credit under Rule 57A and also under Notification No. 217/86 since the definition under both these i.e. Rule 57A and the Notification is pari materia.
7. In view of our findings, we allow the appeal with consequential relief if any.