1982 (1) TMI 67 - HC - Central Excise

Summary

Issues:
1. Interpretation of the residuary Item 68 of the First Schedule to the Excise Act regarding liability to pay duty on parts of agricultural implements.
2. Impact of notifications issued on 30th April, 1975, and 3rd February, 1978, on the liability of excise duty on parts of agricultural implements.
3. Whether parts of non-power operated agricultural implements fall within the purview of Item 68.
4. Consideration of parts of items within the purview of the item itself for the purpose of excise duty.
5. Challenge to the orders of respondents regarding the levy of excise duty on parts of agricultural implements.

Detailed Analysis:
1. The judgment concerns the interpretation of the residuary Item 68 of the First Schedule to the Excise Act to determine the liability of a public limited company for paying duty on parts of agricultural implements. The company manufactures various sprayers, dusters, and agricultural implements, both power and non-power operated.

2. Following a notification issued on 30th April, 1975, certain agricultural implements were excluded from the purview of Tariff Item No. 68, with exceptions for power-operated implements and those designed for use with tractors. However, the question arises whether parts of non-power operated agricultural implements are also excluded from the levy of duty under Item 68.

3. The judgment delves into the period between 30th April, 1975, and 3rd February, 1978, to determine whether parts of non-power operated agricultural implements were subject to excise duty under Item 68. It analyzes the implications of including parts within the scope of the main item for the purpose of levy.

4. The court observed that specific provisions in the First Schedule distinguish between items and their parts for the imposition of excise duty. It noted examples where duty is levied on items separately from their parts, indicating that parts are not automatically considered within the purview of the main item.

5. Ultimately, the court upheld the orders of the authorities regarding the levy of excise duty on parts of agricultural implements until the notification on 3rd February, 1978, which explicitly excluded parts from the purview of Item 68. The challenge to these orders was dismissed, affirming that parts of non-power operated agricultural implements were liable for excise duty under Item 68 during the relevant period.

6. The judgment concludes by discharging the rule granted to the petitioners, directing them to pay costs to the respondents. It also addresses the bank guarantee furnished by the petitioners and outlines the procedure for its cancellation based on payment to the excise authorities.