1991 (6) TMI 150 - AT - Central Excise

Summary

Issues:
1. Classification of fuel dispensing pumps as power-driven pumps under Central Excise Tariff.
2. Binding nature of Board's instructions on the adjudicating authority.
3. Applicability of the extended period for recovery of short levy.

Analysis:

1. Classification of Pumps:
The dispute revolved around whether the fuel dispensing pumps manufactured by the appellants could be classified as power-driven pumps under Item 30-A of the Central Excise Tariff. The appellants argued that their pumps, operated by a 24-volt rechargeable battery, should not be considered power-driven. However, the tribunal found that since the pumps incorporated an electric motor operated by electrical energy from a battery, they met the definition of 'power-operated' under the Factories Act. Therefore, the pumps were deemed as power-operated and classifiable under Item 30-A.

2. Binding Nature of Board's Instructions:
The tribunal addressed the issue of whether the Board's instructions exempting fuel dispensing pumps from duty under Tariff Item 30-A were binding on the adjudicating authority. It was established that quasi-judicial authorities should not be influenced by administrative directives, and they must independently determine the classification based on the tariff wording. Consequently, the tribunal concluded that the Board's instructions and trade notices stating non-chargeability of duty on such pumps were not binding on the adjudicating authority, who had to arrive at a decision based on the tariff's language.

3. Extended Period for Recovery:
Regarding the applicability of the extended five-year period for recovery of short levy, the Department invoked this provision due to the appellants' failure to obtain a Central Excise license and pay duty beyond the exemption limit. However, the tribunal disagreed with the Department's stance, citing the appellants' bona fide belief that their pumps were not dutiable under Item 30-A. The tribunal emphasized that the issuance of a tariff advice did not conclusively resolve doubts about dutiability, especially considering conflicting circulars from the Board and Collectorates. Consequently, the tribunal held that the extended period was inapplicable, and any short levy within the normal period could be recovered, while no penalty was justified.

In conclusion, the tribunal set aside the original order, allowing the appeal and remanding the case for the recovery of any short levy based on the tribunal's findings.