9911796707
TMI Blog1997 (11) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... lassifiable under Chapter 87 and diesel operated IC engines classifiable under Chapter 84. They also manufacture component parts for use in the manufacture of the motor vehicles as well as IC engines. 3. The Department issued a SCN dated 23-3-1988 followed by corrigendum issued on 7-7-1988 asking the appellants to show cause why duty amounting to Rs. 27,887.24 on the component parts used in the manufacture of stationary type of IC engines [which were classifiable under erstwhile T.I. 29(ii) during the period 28-2-1986 to 31-3-1987] should not be recovered and penalty should not be imposed under Rule 173Q read with the relevant Sections/Rules. The Department alleged that the appellants had incorrectly availed exemption under Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication No. 75/86. He, therefore, held that Items like pistons, piston rings, etc. which were used on receipt under Chapter X for the manufacture of stationary type of diesel oil operated IC engines in the factory of the present appellants would not be eligible for exemption under Notification No. 75/86. He further held that the exemption given under the Notification are only for parts and accessories of motor vehicles, tractors and trailers the reference to Chapter 84 was only by way of illustration and not by way of inclusion so as to cover IC engines, even though, stationary type of IC engines also fall under Chapter 84. He also held that the appellants were liable under Section 11A for wilful mis-statement inasmuch as they had failed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944 if such goods were intended to be used as OE parts in the manufacture of IC engines falling under Chapter 84. The Notification also provided that when the use of such parts was made in a place other than the factory of production, Chapter X procedure has to be followed. Consequent on the issue of Notification No. 75/86, the appellants obtained a fresh licence. 6. Shri Lodha strongly contended that in terms of Notification No. 75/86 parts intended to be used as OE parts in the manufacture of IC engines falling under Chapter 84 of the CETA, 1985 was clearly eligible for exemption. The only condition in the Notification was that where the use of the parts was in a factory other than the factory of production, procedure under Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in the Table to the Notification should be those which are intended to be used as original equipment parts in the manufacture of IC engines falling under Chapter 84. He drew attention to the opening part of the said Notification by which exemption was given only to "parts and accessories of motor vehicles, tractors (including agricultural tractors) and trailers falling under 68, 73, 84, 85 or 87". He submitted that the intention as apparent from the opening portion was only to exempt parts and accessories of motor vehicles, tractors etc. and not to any machinery which is used for purposes other than as prime movers of motor vehicles, tractors, etc. He therefore submitted that the lower authorities had correctly held against the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssories of motor vehicles, tractors (including agricultural tractors) and trailers falling under the said schedule; and (ii) in respect of such use elsewhere than in the factory of production of the said goods, the procedure set out in Chapter X of the Central Excise Rules, 1944, is followed. 2. This notification shall come into force on 28th day of February, 1986. 9. As will be observed from the above, what has been exempted by the Notification are parts and accessories of "motor vehicles, tractors, (including agricultural tractors) and trailers falling under Chapter 68, 73, 84, 85 or 87". Clause (i) of the proviso thereto states that the exemption will be subject to the satisfaction of the proper officer that the goods are in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies mentioned in the Tables have necessarily to be parts and accessories of motor vehicles, tractors, (including agricultural tractors) and trailers which are all vehicles and are meant to be mobile. Since the purpose of the proviso is to carve something out of the main provision and not to add something to what has been covered by the main provision, it cannot be deemed to include IC engines which are stationary. Item (a) covers only those IC engines which become part of motor vehicles, tractors or trailers. Stationary IC engines which are not part of motor vehicles, tractors or trailers cannot, therefore, be said to be covered by the exemption Notification. In the instant case the appellants have claimed exemption for stationary IC engine ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
