TMI Blog1987 (6) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... aharashtra. The compressors are items installed in air-conditioners, water coolers, refrigerators and allied appliances and are assessable to excise duty Item 29A (3) of the Tariff to the Central Excise and Salt Act, 19frt (for short 'Act'). The petitioners admittedly have licence under the Act and the Rules for the manufacture of the compressors and pay excise duty on their manufacture. During the period prior to 1973, the petitioners were manufacturing compressors of three different capacities namely, of 1.00 ton, 1.25 tons and 1.34 tons, which were capable of being installed, inter alia, in the air-conditioners and these compressors were sold by the petitioners to different parties all over India. 3. During the period between 1973 and 1976, the petitioners manufactured 23 compressors of a larger capacity suitable for being installed in 1.5 tons air-conditioners. During this period the petitioners acquired 23 fully furnished 'Coldin' air-conditioners cabinets complete in all respect namely, with grills, thermostats and other controls and knobs, from a concern in Ahmedabad known as "Refrigeration Agencies". The compressors were fitted in the air-conditioner cabinets. Out of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the definition clause. There is no serious dispute that a manufacturer of air conditioners need not manufacture all its components. It can manufacture a few, purchase others and manufacture air-conditioners assembling all such components. Section 3 is a charging section providing for levy of excise duty on specified goods in the First Schedule and there is no dispute that air-conditioner is an Item No. 29A(2) in the First schedule. Relevant portion of Section 6 reads as under : "6. The Central Government may, by notification in the Official Gazette, provide that, from such date as may be specified in the notification, no person shall, except under the authority and in accordance with the terms and conditions of a licence granted under this Act, engage in - (a) the production of manufacture or any process of the production or manufacture of any specified goods included in the First Schedule or a salt-petre or of any specified component parts or ingredients of such goods or of specified containers of such goods, or (b) . . . . . . . . . . . . . .. . . . . . . . . ………………………" Great emphasis was laid by Shri Setalwad, the learned Counsel for the petitioners, on the expressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry business of the company. Delhi High Court decision in 74- I.T.R. 465 was also stated to be distinguishable on the ground that the thrust in that case was on the manufacture of goods for the assessee's own use and not for sale. He stated that the sale of an article manufactured is not sine-qua non for the levy of excise duty. For this purpose he placed reliance on the Supreme Court decision in the case of South Bihar Sugar Mills, Ltd. v. Union of India, A.I.R. 1968 (SC) 922 (para 15 at page 928) and the case of The Associated Industries (P) Ltd. v. The Regional Provident Fund Commissioner, Kerala, A.I.R. 1964 (SC) 314. He reiterated that the petitioners have manufactured 23 air conditioners over a period of more than 3 years. One of the air conditioners had in fact been sold. No evidence in the shape of reports from the constituents, the branches or Research and Development department was produced to support the petitioners' claim that air conditioners were really manufactured for the purpose of observing the performance of 1.5 tons capacity compressors. Inviting our attention to the fact that all the relevant facts have been considered by the Central Excise authorities in arrivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assembling activity continued over a period of three years, 18 air conditioners were in fact removed from the factory premises without proper gate-pass and without paying excise duty payable on air conditioners, at least one air conditioner was, as a matter of fact, sold; no evidence was produced to show that the compressors were fitted in the air conditioner cabinets and supplied to the constituents were in reality for testing the performance of the compressors of the capacity of 1.5 tons, on the other hand, indicate that inference drawn by the Central Excise authorities, to say the least, is a possible inference and by no stretch of imagination can be said to be perverse. In the above view of the matter, we have no alternative but to decline to interfere in the finding of fact arrived at by the Central Excise authorities. 8. The excise duty payable was determined at Rs. 1,95,682/-' by the Central Excise Authorities. We are told that the petitioners had paid excise duty on the compressors fitted in the air conditioners. This fact has not been disputed by Shri Desai. Shri Desai, however, stated that if the petitioners wanted to take credit for the excise duty paid on the compres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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