TMI Blog1996 (8) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... e light of the amended provisions of Section 11B of the Central Excises Salt Act, 1944. 2. The clearance of the goods in question was made by M/s. BHEL piecemeal as the whole equipment could not be manufactured at one time. The weight of the equipment which comprised of 3 Electrostatic Precipitator was 754 MT and out of that 54 MT was supplied directly through the sub-vendors of M/s. BHEL. These items comprising of 54 tons are as under as set out in the list of events furnished by M/s. Grasim. i) Insulation material (Mineral Wool) 30.24 MI ii) High Voltage Rectifier Transformers and Electronic Controllers supplied by BHEL Jhansi and Bhopal respectively 14.85 MI iii) Switch gear panels 5.41 MI iv) Geared Motora 3.02 MI v) Interlocks 0.17 MI 53.69 MI say= 54.00 MI These refund claim of M/s. Grasim was rejected by the Assistant Collector vide his order dated 27.5.1993 on the ground that the entire ESP w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served as under: Instead, the lower authority should have examined the aspects as to whether the goods, manufactured by M/s. BHEL and cleared to the appellants, have attained the essential characteristics of the product viz., Electrostatic Precipitator System , in terms of the Interpretative Rules, and I find considerable force in the ground urged by the appellants that in terms of the provisions of Rule 2(a) of the Interpretative Rules, the goods/parts manufactured and supplied by M/s. BHEL could be treated as a complete system of ESP. It is also stated by the appellants that the bought out items weighing 54 MT comprising components such as high voltage rectifier, transformer etc. weighing 14.85 MT, insulation material (mineral wool) weighing 30.24 MT and 8.60 MT of Switch Gear Ponds. 3. It was in the context of the above directions by the Ld. Collector that the Assistant Collector took up the matter for de novo adjudication. M/s. Grasim refund claim was rejected by the Assistant Collector vide his order dated 14.12.1993 on the following grounds. The only point to be decided here is whether the goods manufactured and supplied by M/s. BHEL, Ranipet have attained the ess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... narration of events is that by the first order in original the refund claim was rejected for the reasons that 54 tons of materials/parts out of 764 tons of ESP weight were not supplied by BHEL who had supplied the rest of equipments for ESP and in as much as full precipitators had not been supplied, the appellants were not entitled to the benefit as claimed. The Collector (Appeals) on appeal filed against the said order issued a clear direction for grant of the benefit of Notfn. No. 78/90 in case the goods as cleared by BHEL to Grasim could be considered as ESP in terms of Rule 2(a) of the Interpretative Rules. So far as the direction was concerned the same was not appealed against by the Revenue nor the respondents. This order therefore became final so far as the direction given for consideration of refund was concerned. The Ld. lower authority i.e. the Assistant Collector was therefore required to decide the refund claim in terms of parameters as laid down by the Collector (Appeals). 5. The Ld. SDR for the department pleaded that the Ld. Collector was in error in having observed that the authorities below had classified the parts of the ESP cleared under the tariff heading fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at site. (iv) Necessary civil work required to be carried out. 2. The matter has been examined and it is hereby clarified for information of the Trade that the issue of levy of duty of excise raised above and the provisions of exemption Notification No. 78/90-C.E., dated 20.3.1990, as amended, and has considered that it is necessary or expedient for the purpose of ensuring uniformity in the levy of duty of excise on all pollution control equipments specified in the Schedule annexed to the Notification and in exercise of the powers conferred under Section 37B of Central Excises Salt Act, 1944(1 of 1944), the Board hereby orders that-- (a) benefit of Notification No. 78/90-C.E., dated 20.3.1990, as amended will be available to all machinery, components, equipments, instruments, apparatus etc. even when these are cleared in CKD and SKD conditions from the factory of manufacturer provided the evidence is produced that goods cleared from part of a complete pollution control equipment/system and the evidence is also produced for supply of such an equipment/system to the buyer. (b) An officer not below in rank of Deputy Secretary in the Ministry of Environment Forest cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Notification No. 78/90 was available. 11. He pleaded the purpose of the notification was for taking care of the effluents and pollutants for larger interest of health of the population and for reason of any technicality the benefit should not be denied. 12. In this connection he cited the judgment of Hon'ble Supreme Court reported in 1989 (39) ELT 503 (SC) : 1989 (25) ECR 159 (SC) : ECR C Cus. 1448 SC. 13. His plea is that interpretation of notification should be such that the purpose of the notification is not defeated. 14. We have given a careful thought to the pleas made by both the sides. We observe that M/s. BHEL had contracted to supply the 3 ESP each weighing about 250 M. Tons. The bulk of the parts weighing about 710 tones were supplied by M/s. BHEL after manufacture in their factory and about 54 tons of materials and components through their sub-vendors directly to site at Grasims. The clearance of the parts were made over a period of time of about two years and the ESPs came to be formed on site. The question that falls for consideration is whether the goods as cleared from M/s. BHEL would be eligible to the benefit of Notification No. 78/90. It is not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ception therefore can be taken to the plea that the parts as these were cleared should have been assessed as such and since parts of ESP are not covered by Notification No. 78/90 apparently the benefit of notification legally therefore cannot be given as such. However when a notification for a larger social purpose grants a particular concessions the notification at the same time has to be interpreted in a manner that the purpose of the notification is not frustrated. M/s. BHEL have produced the necessary certificate to the effect that the ESPs in question are eligible to the benefit of notifications. The Departmental authorities approved the classification of goods which were described as ESP under the appropriate heading for ESP and had the knowledge that the components of the same were being cleared by paying duty at the rate applicable but with gate passes showing the classification as boiler parts since the ESP was to be used as an adjunct to the boiler for taking care of pollutants etc. 16. The accepted portion is that components except for 54 tons of material etc. out of about 764 MT have been supplied by M/s. BHEL from their factory on payment of duty which is sought for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnored the orders of the Collector (Appeals) and chose to pass the order holding since individual parts had been cleared no ESP came into existence and requirement of the Rule 2(a) were not fulfilled. What was required to be done was to verify whether the collectively of the parts cleared over a period of time gave rise to an ESP at site. On Appeal the Ld. Collector (Appeals) in his order which is impugned before us however without making any enquiry without laying any basis has held that in terms of Rule 2(a) ESPs as claimed had come into existence. We have here two extremes of approach by the AC and the Ld. Collector (Appeals). What was required to be done was to conduct an enquiry in terms of Collector (Appeals) order dated 24.12.1993 which had legally acquired finality. Since this has not been done we hold that the Ld. lower authority's order is not proper and we therefore, set aside the same and remand the matter to the original authority for de novo decision in the light of our observations above. 18. The appeal of the Revenue is therefore allowed by remand in the above terms. Before parting with the case we would like to observe that the methodology for the purpose of ..... 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