Customs, Excise and Gold Tribunal - Delhi
Gujarat Machinery Manufacturers Ltd. vs C.C.E. on 18 June, 1996
Equivalent citations: 1996(86)ELT520(TRI-DEL)
ORDER Jyoti Balasundaram, Member (J)
1. The above appeal arises out of the order passed by the Collector of Central Excise (Appeals), Bombay upholding the order of the Assistant Collector by which he has rejected the refund claim filed by the appellants for refund of Rs. 86,841.26 P duty paid on re-glass lining on old and used glass-lined equipment.
2. The appellants manufacture glass-lined vessels and clear the same on payment of duty under TI 68 of the Schedule to the erstwhile Central Excise Tariff. The glass lining is a process of setting powder glass frit on the vessels and the equipment for uniform coating and then the vessels are fired. Such glass-lined vessels are used in the chemical and pharmaceutical and fertilizer industry. The glass lined vessels originally cleared by the appellants on payment of duty was received back in their factory when the process of stripping the old lining and fresh glass-lining took place.
3. Both the lower authorities have held that the glass-lining is such a process that without glass-lining, the equipment cannot be utilised for the purposes for which they are meant and hence the re-glass lining amounts to manufacture. The refund claim was also rejected as being partially time-barred.
4. We have heard Shri K.A. Sindhi, learned Consultant for the appellants and Shri P.K. Jain, learned DR for the Revenue. We note that the refund claim is for duty paid when glass-lined vessels are cleared the second time after subjecting them to the process of re-glass lining. The appellants relied upon the decision of the Hon'ble Supreme Court in the case of Lathia Industrial Supplies Company Ltd. v. Collector of Central Excise, Baroda reported in 1987 (29) E.L.T. 751 to contend that the ratio of the Supreme Court decision that re-rubbering and re-lining of old and used vessels does not amount to manufacture, should apply in their case also. Our attention has been drawn to the order of the Tribunal in the case of Collector of Central Excise, Bombay v. Hindustan Tyres reported in 1988 (35) E.L.T. 409 wherein the above cited decision of the Supreme Court has been followed. We however, note from a careful reading of the judgment of the Hon'ble Supreme Court that the ratio contained therein is that in the absence of any dispute that after 14-3-1986, re-rubbering and re-lining of old and used vessels have been held by the department as a process not amounting to manufacture, there is no foundation for fixing 14-3-1986 as the commencement of the period from which the process would not amount to manufacture. The Supreme Court therefore, was concerned with the basis for applying 14th March, 1986 as the cut-off date subsequent to which the department held that the process of re-rubbering and re-lining of old and used vessels was not a process of manufacture. The judgment of the Supreme Court is not on the question whether the process of re-rubbering and re-lining amounted to manufacture or not.
5. In the present case, there is no dispute that the glass lining of the vessel amounts to manufacture as the glass-lined vessel is different in name, character and use from a unlined vessel. Since the process applied to the vessels on their return to the appellants factory is the same as that applied to the vessels lined for the first time, namely the process of setting powder glass frit for uniform coating and then fired in the furnace after stripping old lining there is no substance in the plea of the appellants that the re-glass lining will not amount to manufacture. On the contrary, it is fresh lining that is applied to the vessels and this process amounts to manufacture.
6. The learned Consultant does not press the plea of time bar. Hence in view of our discussion above, we hold that the refund claim is not maintainable both on merits as well as on limitation, uphold the impugned order and reject the appeal.