TMI Blog2009 (8) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... waste and scrap to duty, all other issues are decided in favour of the appellants with consequential relief. The matter is remanded back to Original Adjudicating Authority for re-determining eligibility for SSI benefit, quantum of duty liability - Further, in view of the fact that the issue involves classification and different interpretations were possible, we do not find fault with the view taken by the appellants that they were eligible for the exemption and therefore they did not need Central Excise Registration. Therefore, penalty imposed on all the appellants is also to be set aside. - E/1030-1033, 53-54, 183-186 and 763-764/2009 - A/1952-1963/2009-WZB/AHD - Dated:- 28-8-2009 - Ms. Archana Wadhwa, Member (J) and Shri B.S.V. Murthy, Member (T) Shri Devan Parikh, Advocate, for the Appellant. Shri S.K. Mall, SDR, for the Respondent. [Order per: B.S.V. Murthy, Member (T)]. - M/s. Gabbar Engineering Company, M/s. Ginza Machinery Company Pvt. Ltd. are engaged in the manufacture of industrial sewing machines and bag closer machines and portable bag closer machines etc. After investigation and issue of show cause notice, in the impugned order the Commissioner has fram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Devan Parikh, learned advocate, on behalf of the appellants submitted that the main issue to be decided is whether the industrial sewing machines, bag closer machines manufactured by the appellants and by all the appellants and the portable bag closer machines are eligible for exemption under Notification No. 6/2002 or not. The exemption is available to the sewing machines which do not have an inbuilt motor. He submits that the very same issue had come up before the Tribunal in the case of Harichand Anand Co. reported in 2008 (223) E.L.T. 598 (Tri. - Bang.). In that case the Tribunal was considering the eligibility for exemption of industrial sewing machines imported by the appellant without inbuilt motors. It is his contention that in that case also the motor was connected with the help of V-belt and pulley. As in their case the motor was also imported along with the sewing machine. Even then the Tribunal had taken a view that the appellant was eligible for the benefit of exemption modification which provided exemption for sewing machines without inbuilt motors. Further, he also relies upon the view taken by the Central Board of Customs Excise in respect of the audit par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the motor is not at all visible, inbuilt and pulley are also not visible. Further, he also submits that the bag closer machine is not at all classifiable under Chapter 84 at all. 5. We have considered the submissions made by both the sides in detail and also have considered the records. Even though there are other issues, the learned advocate argued mainly on the eligibility aspect of the industrial sewing machines, bag closer machine and portable bag closer machines manufactured by the appellants. 6. It is noticed from the brochure produced was that in portable bag closer machines, the motor as well as the pulley and V-belt are not at all visible and they form an integral part of the machine. Further, in the case of portable bag closer machine, motor has to be inbuilt with the machine in view of the fact that it has necessarily to be held while stitching the filled bags and it is risky to keep the motor open in such cases. Therefore it is quite clear that as regards portable bag closer machines appellants do not have a case. As regards the classification of portable bag closer machines, the learned DR submitted that it does not come under Chapter 84 at all. However, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roposition is applied to the facts of the case." 7.3 Further, the reply given by the Central Board of Customs Excise to the audit para which has been produced by the learned advocate is also reproduced below for ready reference. "The statement of facts contained in the draft audit para is not admitted. The main point is as to which type of motors will be treated as inbuilt motors. The issue was discussed in the Commissioners' conference held at Bangalore in June 2000. (Copy enclosed). It was concluded that the sewing machines having motors connected externally by means of a belt and not directly, are of the type other than those with built-in motors and are rightly eligible for the benefit of exemption notification. As regards the case law, [(1999) (106) E.L.T. 165], it is stated that the issue in that case was whether the clutch motors were parts of sewing machines of otherwise. An integral part of a machine may not necessarily be inbuilt it could be other than inbuilt also. The motors in this case were not inbuilt in the machines but located outside and were connected to the sewing machine externally with the help of a pulley and belt system. Thus, the notification benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors connected externally with the help of v-belt and pulley are eligible for the exemption. 8. We also find that the issue before the Commissioner was not limited to only this but there were other issues such as liability of the crank shafts manufactured by the appellants, waste and scrap etc. Apparently, in view of our decision that portable bag closer machines are not eligible for exemption, the eligibility of the appellants for SSI exemption will have to be reconsidered. Prima-facie going by the very nature, crank shafts and waste and scrap would be liable to duty as applicable. 9. Therefore we uphold the order of Commissioner as regards crank shafts and waste scrap. Further, in view of the fact that the issue involves classification and different interpretations were possible, we do not find fault with the view taken by the appellants that they were eligible for the exemption and therefore they did not need Central Excise Registration. Therefore, penalty imposed on all the appellants is also to be set aside. 10. In the result except for eligibility of portable bag closer machine for exemption under Notification No. 6/2002 and the liability of crank shafts and waste and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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