1985 (12) TMI 60 - HC - Central Excise

Summary

Issues:
1. Quashing of order by Assistant Collector of Central Excise regarding exemption notifications 119 of 1975 and 118 of 1975.

Detailed Analysis:
The petition sought to quash an order by the Assistant Collector of Central Excise that approved a classification list but denied the petitioners the benefit of exemptions under notifications 119 of 1975 and 118 of 1975. The petitioners, engaged in manufacturing pipes and fabricating RCC pipes for the Municipal Corporation of Greater Bombay, claimed exemptions for specific items under the classification list. The Assistant Collector, noting the petitioners' absence at the hearing, ruled against them, stating that they were not entitled to the exemptions under the said notifications for various reasons.

The High Court referred to previous judgments to interpret notification 119, emphasizing that the exemption should apply even if the end product differs from the material used initially. The court held that the Assistant Collector's interpretation was incorrect and set aside the order. Regarding items under classification list 7(a) and 7(b), the court noted that each article should have been considered for exemption under notification 118, even though the decision was ex-parte. The court found the Assistant Collector's failure to do so as another reason to set aside the order.

The court provided a detailed interpretation of notification 118, explaining that goods falling under a specific item and intended for use in the manufacturing factory or another factory of the same manufacturer are exempt from excise duty. The court clarified that the exemption does not apply to complete machinery meant for producing goods. Additionally, the court disagreed with the interpretation by the Central Excise Tribunal regarding the term "use" in the notification, stating that the use need not result in the article losing its utility.

Ultimately, the court set aside the Assistant Collector's order and directed a fresh hearing, instructing the Assistant Collector to reconsider the exemption eligibility for items under both notifications 119 and 118 based on the court's interpretations. The court did not award costs in this matter, and the ruling was made accordingly.