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Issues involved: Challenge to liability to pay excise duty on "Cooling Coils and Condensers" manufactured on factory precincts.
Judgment Summary: Issue 1: Interpretation of Tariff Schedule Item 29A(3) regarding excise duty on manufactured goods. The petitioners challenged the order holding them liable to pay excise duty on the manufactured cooling coils and condensers. The Collector of Excise found that the products were indeed manufactured on the petitioners' factory premises with materials supplied by them. The petitioners argued that as per Item 29A(3) of the Tariff Schedule, the goods are not dutiable if manufactured for the manufacturer's use and not for sale to others. They relied on a judgment emphasizing that the purpose of manufacture is irrelevant for excise duty. However, the Court disagreed with this interpretation, stating that each sub-clause of the Tariff Schedule is independent and specifies different rates of duty. The Court held that the cooling coils and condensers manufactured by the petitioners fell within the description of Item 29A(3) and were liable for excise duty, rejecting the petitioners' argument. Issue 2: Relevance of Tariff Advice in determining excise duty liability. The petitioners also referred to a Tariff Advice stating that countervailing duty would not apply to refrigerating and air-conditioning plants not sold as assembled units. However, the Court found this advice irrelevant to the present case, as the petitioners had manufactured cooling coils and condensers, which were readily saleable. The Court clarified that even if a company constructs a plant for its own use, it amounts to manufacture, and in this case, the petitioners could have purchased the products from the market instead of manufacturing them. The Court concluded that the petition failed and was rejected. Conclusion: The Court upheld the decision of the Excise authorities, confirming the liability of the petitioners to pay excise duty on the manufactured cooling coils and condensers, based on the interpretation of the Tariff Schedule and the nature of the goods produced.
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