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"In exercise of the powers conferred by sub rule (1) of rule 8 of the Central Excise Rules, 1944 the Central Government hereby exempts power driven pumps falling under Item No. 30-A of the First Schedule to the Central Excise and Salt Act, 1944 (1 of 1944), and specified in column (2) of the Table annexed hereto from so much of duty of excise leviable thereon as is in excess of the duty specified in the corresponding entry in column (3) of the said Table."

This extract clearly shows that under this notification exemption from payment of a part of the excise duty, otherwise payable on the power-driven pumps under Item 30A, has been given. This part by itself has no application to the excise duty payable on electric motors. There are two provisos to this notification. The first proviso inter alia reads as under :-

"Where the aforesaid power driven pumps on which the duty of excise is leviable are fitted with duty paid internal combustion engines falling under sub-item (ii) of Item 29 or electric motors falling under sub-item 2(ii) of Item No. 30 of the First Schedule to the aforesaid Act, such power driven pumps shall also be exempt from so much of the duty of excise leviable thereon as is equivalent to the duty of excise or the additional duty under section 2A of the Indian Tariff Act, 1934 (32 of 1934) as the case may be, already paid on such internal combustion engines or electric motors."

5. We are not in the instant case concerned with the internal combustion engines falling under sub-item (ii) of item 29. We are concerned with the electric motors falling under sub-item 2(ii) of Item No. 30. Sub-item 2(ii) of item 30 specifies electric motors designed for use in circuits at a pressure exceeding 400 volts and exceeding 10 H.P. The other part of the first proviso' covers the cases falling under sub-item 2(1) of item No. 30 It reads as under :-

"Where the aforesaid power driven pumps on which the duty of excise is leviable are fitted with duty paid electric motors, other than those electric motors falling under sub-item 2(ii) of item No. 30, or fitted with duty paid rotors or stators falling under that Item, of the aforesaid schedule, such power driven pumps shall also be exempted from so much of the duty of excise leviable thereon as is equivalent to the duty of excise or the additional duty under section 2A of the Indian Tariff Act aforesaid, calculated at the rate of 10 per cent ad valorem on such electric motors or motors or stators, as the case may be."
"Value in relation to any excisable goods does not include the amount of the duty of excise, sales tax and other taxes, if any, payable on such goods...."

This definition also makes it clear beyond any doubt that the value or assessable value of an excisable goods cannot be inflated by including therein the amount of excise duty payable on such goods.

9. The question, therefore, which arises for our consideration is whether the expression 'payable on such goods' used in amended section 4 and the expression 'article' used in section 4 before it was amended means the whole of it or also connotes a part thereof. Unless by application of manufacturing process two articles have been transferred into a single article known by a distinct name in the market or having a distinct use and identity they do not change their character. We are, therefore, of the opinion that unless the transformation is so complete as to change the identity of 'goods' (used in amended section 4) and 'article' (used in section 4 as it was before amendment) includes a part thereof. Looked at from this angle we are of the opinion that where excise duty is payable on an electric motor which is used for making a power driven pump it cannot be included in the assessable value of the power driven pump of which electric motor forms a part. When we say that it is payable we not only mean payable and recoverable but we also mean payable and in respect of which exemption has been granted. When excise duty which is payable and recoverable on an electric motor cannot be included in the assessable value of a power driven pump of which it forms a part, it can much less be included in a case where it is payable but in respect of which exemption has been granted. That is the reason why we have stated in this judgment that this expression applies both to a case where it is a payable and recoverable and also to a case where it is payable but in respect of which exemption has been granted. It is no body's case that by fitting the electric motor to a pumping set, a new 'goods' with a distinct identity and a distinct name is brought into existence.