COLLECTOR OF CENTRAL EXCISE, NEW DELHI versus HINDUSTAN SANITARYWARE & INDUSTRIES

Citation: [2002] SUPP. 2 S.C.R. 224 · Decided: 10-09-2002 · Supreme Court of India · Bench: S.S.M. QUADRI, S.N. VARIAVA · Disposal: Dismissed
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Judgment (excerpt)

A 
COLLECTOR OF CENTRAL EXCISE, NEW DELHI 
V. 
HINDUSTAN SANITARYWARE & INDUSTRIES 
SEPTEMBER 10,2002 
B 
(SYED SHAH MOHAMMED QUADRI AND S.N. VARIA VA, JJ.] 
Central Excise Rules, 1944: 
R.8(1)-Notification No. 217186 dated 2.4.1986 (as amended by 
C Notification No. 82!87(E)-Exempting plaster of paris, used as input, from 
excise duty-Manufacturer of sanitaryware-Making moulds of plaster of paris 
and using them as input in manufacturing sanitaryware as final product-
Claiming exemption of the Notification-Excise authorities declining to grant 
benefit, but Tribunal holding that exemption Notification would apply-Held, 
D plaster of paris which is used as input in relation to manufacture of sanitaryware 
(final product), is exempt under the Notification as amended. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1627 of 
I994. 
E 
From the Judgment and Order dated 1.4.1991 of the Customs Excise 
& Gold (Control) Appellate Tribunal New Delhi in E. Appeal No. 384 I/ 
90-C 
WITH 
p 
CA 6219-of 1994. 
G 
H 
R.P. Bhatt G. Venkatesh Rao. K.C. Kaushik and B.K. Prasad, for 
the Appellants. 
B.C. Ahmed, for Mis Lawyers Associated. 
The following Order of the Court was delivered by 
These two appeals arise from the judgments of the Customs, Excise and 
Gold (Control) Appellate Tribunal in Order No. 304/91-C in E/Appeal No. 
3841/90-C dated April 1, 1991 and in Order No. 600191-C in E/Appeal No. 
224 
' 
C.C.E. v. HINDUSTAN SANITARYWARE& INDUSTRIES 
225 
2031 /9 l-C dated July 19, 1991. The judgment in Order No. 304/91-C in E/ A 
Appeal No. 3841/90-C dated April I, 1991 is followed in Order No. 600/91-
C in E/Appeal No. 2031/91-C dated July 19, 1991. 
The respondent, a manufacturer of sanitaryware, uses plaster of paris as 
inputs for the final product of sanitaryware. The process involves making of 
moulds from plaster of paris which are in turn used as inputs for manufacture B 
of sanitaryware. Tbe rc·spondent claimed the benefit of exemption under 
Notification No. 217/86 (as amended by Notification No. 82/87-CE.) 
In these cases, though the Excise authorities declined to grant the benefit 
of exemption, the Customs, Excise and Gold (Control) Appellate Tribunal set C 
aside their orders and held that the exemption would apply to the respondent. 
Mr. R.P. Bhan, learned senior counsel appearing for the revenue, 
contends that as the moulds of plaster of paris are goods classified under the 
Central Excise Tariff Act, 1985 they cannot be treated as inputs; they must 
be treated a the final product and as they are exempted, the respondent is not D 
entitled to the benefit of exemption under Notification No. 217 /86. 
We are afraid, we cannot accept the contention of the learned senior 
counsel. 
The said Notification reads as follows: 
"SPECIFIED GOODS USED WITHIN THE FACTORY OF 
PRODUCTION IN THE MANUFACTURE OF FINISHED GOODS. 
In exercise of the powers conferred by sub-rule (I) of Rule 8 of 
E 
the Central Excise 'Rules, I 944, the Central Government hereby 
exempts goods specified in column (2) of the Table hereto annexed F 
(hereinafter referred to as 'inputs') manufactured in a factory and 
used within the factory of production, in or in relation to the 
manufacture of final products specified in column (3) of the said 
Table, from the whole of the duty of excise leviable thereon, which 
is specified in the Schedule to the Central Excise Tariff Act, 1985 (5 G 
of 1986) : 
Provided that nothing contained in this Notification shall apply to 
inputs used in or in relation to the manufacture of final products 
which are exempts from the whole of duty of excise leviable thereon 
or is chargeable to nil rate of duty. 
H 
226 
SUPREME COURT REPORTS (2002] SUPP. 2 S.C:R. 
A 
Explanation : For the purposes of this notification, "inputs" does not 
B 
c 
D 
E 
include -
(i) to (iv) *** 
*** 
*** 
THE TABLE 
S.No. Description of 
Inputs 
Description of 
final products 
I. 
Goods classifiable under 
any headings of chapters 
28,29,30,32,33,34,35, 
36,37,38,39,40,48, 70, 
72, 73, 74, 75, 76, 78, 79, 
80, 81, 82, 83, 84, 85, 86, 
87, 88, 89, 0, 91, 92, 93, 
94, 95, or 96 
(other than those falling 
under Heading Nos. 
36.03 or 3 7 .05) of the 
Schedule to the Central 
Excise Tariff Act, 1985 
(5 of 1986) 
Goods classifiable under 
any headings of chapters 
28,29,30,32,33,34,35, 
36,37,38,39,40, 70, 72, 
73, 74, 75, 76, 78, 79, 80, 
81, 82, 83, 84, 85, 86, 87, 
88, 89,90,91,92,93,94, 
95, or 96 
(other than those 
falling under Heading
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