1985 (7) TMI 368 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 56C(2) and exemption Notification No. 118/75-C.E. for duty-free use of re-made bushings.
2. Applicability of rule 56C and Notification No. 118/75-C.E. in parallel.
3. Whether re-making of bushings constitutes repair or manufacture.
4. Condonation of delay in filing appeal.

Analysis:

1. The case involved a dispute regarding the entitlement of the respondents to use re-made bushings in their factory free of duty under Rule 56C(2) or exemption Notification No. 118/75-C.E. The respondents claimed exemption under the notification, but the Asstt. Collector rejected their claim. The Collector (Appeals) allowed their claim, leading to the department's appeal. The Tribunal analyzed that the respondents dismantled old bushings, re-melted metal parts at a secondary manufacturer, and then fabricated them into new bushings. The Tribunal held that the respondents were entitled to remove platinum sheets for captive use free of duty under Rule 56C(2)(c) and could avail of the exemption under the notification for assessing the final bushings.

2. The department argued that rule 56C and the notification were mutually exclusive, and the respondents could not avail of both. However, the Tribunal found no bar in the provisions preventing the respondents from utilizing both statutory provisions. The Tribunal clarified that the respondents could choose to avail of either or both provisions as they were independent and statutory in nature.

3. The respondents contended that re-making the bushings constituted repair and not manufacture. They argued that the re-made bushings were not distinct goods and cited High Court authorities to support that repair did not amount to manufacture. However, the Tribunal noted that the respondents had not raised this plea earlier, and the lower authorities had not examined it. The Tribunal found that the re-making process involved significant fabrication work, leading to the creation of new bushings, and upheld the Collector (Appeals)'s finding that the re-made bushings were excisable goods.

4. The Tribunal addressed a preliminary objection raised by the respondents regarding the delay in filing the appeal. Upon examination of the original record, it was found that the appeal was filed within the stipulated time, and the objection was withdrawn. The Tribunal proceeded with the appeal and ultimately upheld the Collector (Appeals)'s decision, rejecting the department's appeal.

In conclusion, the Tribunal ruled in favor of the respondents, allowing them to use re-made bushings duty-free under Rule 56C(2)(c) and avail of the exemption under Notification No. 118/75-C.E. The Tribunal emphasized the independence of the statutory provisions, rejected the department's objections, and upheld the decision of the Collector (Appeals).