2000 (9) TMI 141 - AT - Central Excise

Summary

Issues:
1. Whether jigs and fixtures manufactured by M/s. Hindustan Motors Ltd. are excisable goods.
2. Whether exemption from payment of duty is available under Notification No. 220/86-CE., dated 2-4-1986.

Analysis:

Issue 1:
The appeal raised the question of whether the jigs and fixtures manufactured by M/s. Hindustan Motors Ltd. are excisable goods. The appellant argued that these goods, used for their own production purposes and later sent to sub-contractors, were not marketable and thus not dutiable. The appellant relied on legal precedents emphasizing marketability as a crucial factor for dutiability. However, the Department contended that the goods were capable of being marketed, citing the fact that they were cleared to job-workers for manufacturing components. The tribunal held that the goods were indeed marketable as they were capable of being sold, leading to the conclusion that the jigs and fixtures were excisable goods.

Issue 2:
Regarding the exemption under Notification No. 220/86-C.E., the tribunal found that the jigs and fixtures, once cleared outside the factory, did not meet the condition of being intended for use in the factory of manufacture as specified in the notification. The tribunal emphasized that the condition of 'use in the factory in which they are manufactured' was substantive and not merely procedural. As the goods were removed for use outside the factory, they did not qualify for the exemption. The tribunal also rejected the argument that the extended period of limitation was not applicable, as the appellant had not disclosed the manufacture and clearance of the goods to the Department as required by law. Ultimately, the tribunal invoked a larger period of limitation for demanding duty, while reducing the penalty imposed on the appellant.

In conclusion, the tribunal held that the jigs and fixtures manufactured by M/s. Hindustan Motors Ltd. were excisable goods and that they did not qualify for the exemption under Notification No. 220/86-CE. The tribunal invoked a larger period of limitation for demanding duty due to non-disclosure of facts by the appellant, while modifying the penalty imposed.