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3. The Assistant Collector vide his order dated 12-5-1980 held that clearance of electric motors took place when it was taken for captive consumption, hence the assessee should pay duty on the electric motors before these were used for the manufacture of pumps and accordingly approved the classification list. On appeal to Collector (Appeals) by the assessee, the ld. Collector (Appeals) reversed the order of Assistant Collector and held that the electric motors, which are used in the power driven pumps were different from other Electric Motors and it was reasonable to collect duty on Electric Motor used in the power driven pump at the time of clearance of power driven pump. The revenue is aggrieved with this on a sole ground that the amended Rules 9 & 49 of Central Excise Rules, 1944 and by enactment of Section 51 of Finance Act, 1982, duty on electric motor should be paid before it is removed for further use in the manufacture of power driven pumps. Once electric motor comes into existence and the same is fitted with power driven pumps, it has to discharge its duty liability under Rules 9 & 49, before it is cleared for further use in the factory.

4. It is the contention of the assessee that the electric motor used in the pump portion is an integral component part of the pump set and is manufactured simultaneously alongwith the pump set. The motor loses its identity and is inseparable and unidentifiable. It is inbuilt in manufacture of power driven pump. These motors are different from the bare motor, as they differ in form and appearance and their manufacturing process is altogether different. They are not in marketable form and the bare electric motor cannot be used in the pump set. It is also pleaded that Rotors and Stators being component parts of Electric Motors of power driven pumps are not marketable for use in the manufactured electric motor ready for sale in the market as they are manufactured only for the purpose of pumps and not for any other use. The assessee has also relied on the judgment of the Tribunal as reported in 1984 (17) E.L.T. 431 (Tribunal), which is based on the clarification issued by Government of India, that motors are integral parts of power driven pumps. They also rely on the exception Notification No. 57/78, dated 1-3-1978, which exempts this item from levy of duty.

10. At the first appeal stage, the respondents maintained that duty was payable on motors only at the time of clearance of power driven pump(s) incorporating them but altered the tracks of their arguments before the Collector (Appeals) stating that manufacture of electric motor and power driven pump of which they formed a composite part, was taken up simultaneously and at any point of time it cannot be stated that electric motors are manufactured first and the power driven pump manufactured thereafter and they also drew attention towards the Department's instructions issued by the CCE, Baroda which had mentioned, inter alia that in respect of monoblock pumps, as the motor was an integral part of the entire set, the duty on electric motors and stators can be collected at the time of clearance of monoblock pump sets.

13. I have gone through the impugned order and the above submissions I find that in view of the amended Rules 9 and 49, an excisable item which is manufactured in a factory is required to be accounted for before being cleared for captive consumption and if dutiable the duty is also required to be paid at this stage that is before captive consumption unless and until such payment is deferred and the duty is allowed to be collected subsequently by virtue of some legal provision. Thus for instance in the case of Cellulose Spin Yarn and Cotton Yarn in respect of which duty could be collected (later) along with duty on cotton fabrics in terms of Rule 49A. The respondents have not drawn attention to any Rule under which the payment of duty in the case of electric motors captively consumed in the manufacture of power driven pumps could be deferred till the time of clearance of the power driven pump themselves. They have referred to Baroda Collectorate Circular dated 1-4-1975. These instructions also show that entry in RG-1 is required to be made before these motors are used for captive consumption. It does not refer to any rate but allows the deferment of collection of duty to the stage of clearance of monoblock pump in the context of exemption Notification No. 83/72 on the ground that the extent of exemption could be determined only after knowing the value of the pump sets.