1985 (6) TMI 102 - AT - Central Excise

Summary

Issues:
1. Whether the goods manufactured by the appellants are liable to Central Excise duty under Item 30(4) of the Central Excise Tariff.
2. Whether the armature windings produced by the appellants are considered complete armatures or unfinished goods.

Analysis:
The case involved a revision application filed by M/s. B.K. Engineering & Company against an Order-in-appeal passed by the appellate Collector of Central Excise, Calcutta. The central issue was whether the goods manufactured by the appellants were subject to Central Excise duty under Item 30(4) of the Central Excise Tariff. The Central Excise Officers found that the appellants were manufacturing "24 Volts D.C. Armature" without the required license and had removed armatures without paying duty. The Deputy Collector of Central Excise held the charges as established and imposed penalties. The appellants contended that the goods were armature windings, not complete armatures, and therefore, not liable for duty. The Adjudicating Officer and the Appellate Collector disagreed, stating that the goods were indeed armatures subject to duty.

In their appeal, the appellants reiterated that the goods were armature windings, not complete armatures. The Tribunal had to determine whether the product manufactured by the appellants was a finished armature fit for use or an unfinished product requiring further processing elsewhere. The appellants argued that the goods were not complete armatures as they required additional processing by other entities before being usable in D.C. Motors. The Departmental Representative contended that the goods were armatures, part of electric motors, and thus liable for duty under the Central Excise Tariff.

During the hearing, samples of the products were presented, showing armatures seized from the appellants' factory and finished armatures. The Tribunal inspected the samples and concluded that the goods manufactured by the appellants required further processing, such as grinding/turning and varnishing, to be usable as armatures. As the appellants did not complete the necessary processes before removing the goods from their factory, the Tribunal determined that the armature windings were not complete armatures and therefore not subject to Central Excise duty under Item 30(4) of the Central Excise Tariff. Consequently, the appeal was allowed in favor of the appellants.