THE TATA IRON AND STEEL CO. LTD., BIHAR versus THE COLLECTOR OF CENTRAL EXCISE, PATNA

Citation: [2005] 2 S.C.R. 457 · Decided: 02-03-2005 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off

Judgment (excerpt)

THE TATA IRON AND STEEL CO. LTD., BIHAR 
v. 
THE COLLECTOR OF CENTRAL EXCISE, PATNA 
MARCH 2, 2005 
[ARIJIT PASAYAT AND S.H. KAPADIA, JJ.] 
Central Excise Act, 1944-Exemption Notification-Entitlement of-
Assessee manufacturing parts of loco wagons and rolling stock at its factory 
A 
B 
and bringing it to other factory for use in repair and maintenance of transport C 
equipment used within the factory-Benefit of exemption sought-Issuance of 
show cause notice alleging breach of Notification:_Tribunal held that 
Notification not applicable as the machinery for which parts were meant not 
installed in the factory but used in factory-Plea that when placed on rail, it 
can be set to be placed in position, and thus, installed-On appeal, held: For 
want of some more factual details with regard to installation of machines, D 
matter remanded back for fresh adjudication-Furthermore, the Tribunal'failed 
to consider that the expression 'machinery installed in the factory' not covered 
in the Headnote of the Notification-As such the Tribunal directed to consider 
the effect of the absence of the words. 
Section /IA-Central Excise Rules, 1944-Rules 9(2) and 196(1) and E 
Chapter X-Assessee manufacturing parts of loco wagons and rolling stock at 
its factory and bringing it to other factory for use in repair and maintenanle 
of transport equipment used within the factory-Benefit of Notification sought-
/ssuance of show cause notice proposing duty and penalty for contravention 
of procedure under Chapter X of Rules by consignee-other factory on failing F 
. to intimate actual use of goods received from consignor under Rules 9(2) and 
196(1) and section / JA(J)-Authority holding section I IA(/) applicable 
whereas Tribunal holding notices within tiine with reference to Rule 196-0n 
appeal, held : Tribunal .introduced Rule 196 without giving opportunity to 
assessee-Assuming that assessee entitled to exemption but the Tribunal did 
not consider whether the consignee could be proceeded against for not following G 
the procedure under Chapter X and violation of the terms and conditions of 
the License in proper perspective-Hence, matter remanded back for fresh 
adjudication. 
Words and Phrases: 
457 
H 
458 
SUPREME COURT REPORTS 
[2005] 2 S.C.R. 
A 
'Install' or 'installed ',Meaning of 
• 
J 
Appellant-asses~ee manufactured parts of foco wagon· and rolling 
stock at its factory and brought them to the other factory for repair and 
maintenance of transport equipments used for moving the material and 
products within the factory. Appellant sought the benefit of the 
B Notification _No. 281/86 dated 24.4.1986 exempting the excisable products 
used for repairs and maintenance of machinery, with regard to the parts 
of loco-wagon and rolling stock falling under Chapter 86 of the Schedule 
under Central Excise Tariff Act, 1985 manufactured in its factory and 
brought to other factory for repair and maintenance of transport 
C equipments used for movin~ the material and products within the factory. 
Department issued show cause notices to the appellant's factory alleging 
breach of the terms and conditions of the Notification. The Tribunal held 
. 
. 
that locomotive or rolling stock wa·gon or bogies are moving items and 
were not so placed or put or fixed in a position ?S such the benefit of th~ 
Notification was not available since it applied to machinery installed in 
D the factory and not to the machinery used in the factory. Hence, the first 
and' second appeal. 
Appellant had s
0
ought permission under. Rule 192 of Central Excis~ 
Rules for bringing parts of loco engine and rolling stock from its factory 
E to the other factory without payment of duty, claiming the benefit of the 
notification bi,It the same was refused. Department issued show cause 
notice to the appellant proposing imposition of duty and penalty for 
contravention of procedures contained in Chapter X by the other factory-
consignee having failed to intimate the actual use of goods received from 
the appellant's factory-consignor under Rules 9(2) and 196(1) of the Rules 
F ·read with proviso to section 1 l(A)(l) of the Central Excise Act, 1944. With 
regard to the show cause notices to be within limitation period, the 
Adjudicating Authority and the First Appellate Authority proceeded as 
if section llA(l) was applicable whereas CEGAT held that for, raising a 
demand under Rule 196, limitation under section 1 lA(l) is not releyant 
and since no period of limitation 

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