LexM/S MOTOR INDUSTRIES CO. LTD. versus COMMISSIONER OF CENTRAL EXCISE, AURANGABAD
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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M/S MOTOR INDUSTRIES CO. LTD.
A
v.
COMMISSIONER OF CENTRAL EXCISE, AURANGABAD.
JANUARY 20, 2006
[ASHOK BHAN AND S.H. KAPADIA, JJ.]
B
Central Excise Tariff Act, I 985-Chapter 84-Nozzles and nozzle holders
used in coupling of injectors-Exemption-Entitlement of-Failure of tribunal
and authorities to decide about construction and components of injector- c
Failure of department to adduce evidence that nozzles and nozzle holders
were intermediate, products which on coupling became injector, and were
marketable-Assessee also failed to prove their entitlement to exemption-
Thus, matter remitted to Adjudicating Authority to decide afresh.
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Appellant-assessee is engaged in the manufacture of nozzles, nozzles D
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holder and injectors. Department issued notice to the appellants for levy
of duty on nozzles and nozzle holders in respect of injectors since the
nozzles and _nozzle holders falling under tariff item 8409.00 were
intermediate products used in the coupling or assembly of injectors (final
product) falling under 8409.00 and on completion of process of coupling E
a new independent product emerged, namely,. an injector. Appellant
relying on the case of *Collector of Central Excise v. Motor Industries Co.
Ltd., contended that injector was {I fitment of nozzles into nozzle holders
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and on coupling no new product came into existence; and that by
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Notifications non-vehicular injectors and also vehicular nozzles and nozzle
holders were exempted from payment of duty. Tribunal held that the F
assessee was not entitled to exemption under the Notification as nozzles
and nozzle holders were specifically excluded and that the case of Motor
Industries Co. Ltd was not applicable. Hence the present appeal.
Remanding the matter to the Adjudicating Authority, the Court
G
HELD: Authorities below including the tribunal did not decide as
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to how an injector is constructed and what are its components. The burden
was on the department to lead evidence on manufacture and marketability
which it did not exercise. Also the burden was on the appellant to prove
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492
SUPREME COURT REPORTS
[2006] I S.C.R.
A that they were entitled to exemption under the notification. The question
of manufacture, classification and exemption are inter-connected. The
question of exemption will arise only after the first question on coupling
or assembly is decided. Exemption notifications as amended after Central
Excise Tariff Act, 1985 has to be seen and also the application of assembly
B
of injectors to vehicular and non-vehicular user has to be examined in the
light of the 1985 Act. Assistance of HSN i11 that regard may also be taken.
1494-B-C; E-GI
*Collector of Central Excise v. Motor Industries Co. limited, (1989) 43
ELT 290, disapproved.
c
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4391-4392
of 2000.
From the Judgment and Order No. 601-602/2000-B dated 20.4.2000 of
the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi in
D Appeal Nos. E/4495/89-B and E/5550/91-B.
Joseph Vellapally, U.A. Rana, Sandeep Kharel, Ms. S. Roy and Ragvesh
Singh for M/s. Gagrat & Co. for the Appellant.
Mohan Parasaran, ASG, Manish Sharma and P. Parmeswaran for
E Respondent.
The Judgment of the Court was delivered by
KAPADIA, J. The short question which arises for determination in
these ~ivil appeals filed by the assessee under section 35-L(b) of the Central
F Excise Act, 1944 (hereinafter referred to as "the Act") is whether assembly
of nozzles and nozzle holders (intermediate products) brings into existence a
new product called an "injector" and if so, whether the department was right
in classifying the said injector under sub-heading 8409.00.
Appellant is engaged in the manufacture of nozzles, nozzles holder and
G injectors. Vide show-cause notice dated 3.9.1986, the department called upon
the appellant to show cause as to w~y duty @ 20% ad valorem on the value
of nozzles and nozzle holders should not be recovered in respect of injectors
on the ground that the appellant had produced nozzles and nozzle holders
falling under tariff item 8409.00 which were captively consumed for the
H manufacture of injectors falling under 8409.00 for which no declaration was
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MOTOR INDUSTRIES CO.LTD.,., COMM. OF CENTRAL EXCISE, AURANGABAD !KAPADIA, J.]
493
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made by the appellant in their classification list. At this stage, we may point A
out that the matter has a chequerExcerpt shown. Read the full judgment & AI analysis in Lexace.