TMI Blog2005 (3) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... wth Shop, Adityapur. The matter is remanded to CEGAT for fresh adjudication keeping in view the legal position indicated supra. - 5421 of 1999 - - - Dated:- 2-3-2005 - Arijit Pasayat and S.H. Kapadia, JJ. [Judgment per : Arijit Pasayat, J.]. - These three appeals under Section 35L of the Central Excise Act, 1944 (in short the 'Act') are directed against three separate orders passed by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (in short the 'CEGAT'). 2.Civil Appeal No. 5421/1999 relates to the issue whether the benefit of Notification No. 281/86, dated 24-4-1986 is available to parts of loco wagon and rolling stock manufactured by the assessee-appellant. It concerns show cause notices issued in 1987 to Growth Shop at Adityapur, alleging breach of the terms and conditions mentioned in the aforesaid Notification. The notice relates to the consignor i.e. the Growth Shop. The CEGAT's decision which is impugned in the said appeal is also based on certain findings recorded in the CEGAT's order which forms the subject-matter of challenge in C.A. No. 5836 of 1999. There also the issue related to the question of eligibility for benefit of exemption o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f limitation. Though the show cause notice indicated that the same was issued in terms of Section 11(A)(1) (proviso) of the Act, the CEGAT held that it is not Section 11(A)(1) of the Act which is really relevant but Rule 196 and since no period of limitation is prescribed therein, the show cause notices were issued within time. 6.Mr. A.K. Ganguli, learned senior Counsel appearing for the appellant submitted that the Notification No. 281/86 exempts the excisable products used for repairs and maintenance of machinery. It does not distinguish between locomotive and any other machineries and the trucks and other transport equipments which undisputedly are covered by the expression "machinery", were exclusively used within the factory for the purpose of carrying raw materials, semi-finished goods etc. Parts for maintenance of such trucks and locomotives would definitely qualify for exemption. It was submitted that there is no serious dispute raised by the revenue that the trucks and other transport equipments were machinery. What the revenue has tried to project is that they were not meant for machinery which was installed. The term ' installation' does not mean that it should be embe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals reads as follows : "Exemption to all excisable goods produced and used within the same factory or other factory of same manufacturer for repairs or maintenance of machinery. In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts all excisable goods manufactured in a workshop within a factory and intended for use in the said factory or in any other factory of the same manufacturer, for repair or maintenance of machinery installed therein from the whole of the duty of excise leviable thereon which is specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986): Provided that where such use is in a factory of a manufacturer, different from his factory where the goods have been manufactured, the exemption contained in this notification shall be allowable subject to the observance of the procedure set out in Chapter X of the Central Excise Rules, 1944". 10.The said Notification has been issued in exercise of powers conferred by sub-rule (1) of Rule 8 of the Rules. The Notification consists of two parts. The first part relates to excisable goods manufactured in a workshop withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tallation has been satisfied? That the bus or lorry has been set up for use or service when it is put on the road seems clear and in that sense buses or lorries were installed. The statutory test of installation was satisfied by the assessee because such installation as the buses and lorries were capable or was completed. 15.The assumption that the expression ''installed'' must necessarily mean "fixed in' position" at the time when the plant is worked or used does not, seem to be justified. The expression ''installed" is also used in the sense of "inducted or introduced", and if that be the sense in which that expression is used, there is nothing inconsistent in the context in which that word is used which will justify in holding that the word "plant" in Section 10, sub-section (2), Clause (vi-b) of the Income Tax Act, 1922 was not intended to include vehicles. [See Commissioner of Income Tax (Central) Bombay v. Saraspur Mills Ltd. (1959) 36 ITR 580 at 581)]. 16.As per P. Ramanatha Aiyar's Law Lexicon, Second Edition 1997, the expression 'installed' did not necessarily mean 'fixed in position', but was also used in the sense of "intended or introduced'. As held in Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccomplish the purposes for which it is set up; to set or fix for use or service, as to install a lighting system. 22.As applied to machinery, the word has a technical meaning, and refers to the whole of a system of machines, apparatus, and accessories set up and arranged for working, as in electric lighting, transmission of power, etc. In this sense "installations" may be synonymous with "appliances''. 23.As per Words and Phrases, Permanent Edition, Vol. 21-A the word 'install' means to set up or fix. (See State v. Jones, 89 S.E. 2d 129, 131, 242 N.C. 563). 24."Installed" means to set or fix, as a lighting system, for use or service. (See Smith v. Kappas, 12 S.E. 2d 693, 697, 218 N.C 758). 25.The word "install'' meant to set up or fix in position for use or service. (See King v. Elliott, 147 S.E. 701, 704, 197 N.C. 93). 26.Where a contract for the sale of a cleaning attachment to a steam boiler allowed the buyer 60 days after it was installed in which to make a trial of its effectiveness, installation is held to have been complete when the cleaner was affixed to the boiler, although by reason of the plant not being operated no test of it was made until later. (See De Merr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the assessee-appellant that the wagon and the trucks which were quite heavy are used in the factory premises on fixed rails and they are not taken out of the factory premises. In that sense when they were placed on rails they can be said to be placed in position. Merely because there is some movement it does not dilute the position that they have been installed. We feel some more factual details are necessary to be recorded in this regard to come to a definite conclusion as to whether the machineries were installed or not. Further, the Notification No. 281/86-C.E., dated 24-4-1986 has a Head Note which has been quoted above. It indicates exemption to excisable goods produced and used within the factory for repairs and maintenance of machinery. It does not use the expression "machinery installed in the factory". This aspect has not been considered by the CEGAT. Therefore, it would be appropriate for the CEGAT to hear the matter afresh and record a positive finding on the factual aspects, keeping in view the decision in Mir Mohammad's case (supra) and the definitions noted above. It shall also consider the effect of the absence of words "installed in the factory" in the Hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd shall then be granted a registration certificate in the proper form. The concession shall unless renewed by the Commissioner cease on the expiry of the registration certificate. Provided that, in the event of death, insolvency or insufficiency of the surety, or where the amount of the bond is inadequate, the Commissioner may, in his discretion, demand a fresh bond; and may, if the security furnished for a bond is not adequate, demand additional security. Rule 196 - Duty leviable on excisable goods not duly accounted for. - (1) If any excisable goods obtained under Rule 192 are not duly accounted for as having been used for the purpose and in the manner in the application or are not shown to the satisfaction of the proper officer to have been lost or destroyed by natural causes or by unavoidable accident during transport from the place of procurement to the applicant's premises or during handling or storage in the premises approved under Rule 192, the applicant shall, on demand by the proper officer, immediately pay the duty leviable, on such goods. The concession may at any time be withdrawn by the Commissioner if a breach of these rules is committed by the applicant, his ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be." 34As the. heading of the Rule 196 itself goes to show it relates to duty leviable on excisable goods not duly accounted for. Rule 192 speaks of application for concession. Rule 196 provides that if any excisable goods obtained under Rule 192 are not duly accounted for as having been used for the purpose and in the manner stated in the application or are not shown to the satisfaction of the proper officer to have been lost or destroyed by natural causes or by unavoidable accident during transport from the place of procurement to the applicant's premises or during handling or storage in the premises approved under Rule 192, the applicant shall on demand by the proper officer immediately pay the duty leviable on such goods. It further provides that the concession may be withdrawn if a breach of the rules committed by the applicant, his agent or any person employed by him. In the event of such breach, power is given for forfeiture of the security deposited under Rule 192 and for confiscation of the excisable goods and all goods manufactured from such goods in store at the factory. In other words, Rule 196 deals with a situation of withdrawal for a concession. If any concessi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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