1991 (4) TMI 270 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 91/68-C.E. and Notification No. 61/86-C.E.
2. Interpretation of the term "automobiles" in the context of the exemption notifications.
3. Applicability of the extended period of limitation for duty demand.

Detailed Analysis:

1. Eligibility for Exemption under Notification No. 91/68-C.E. and Notification No. 61/86-C.E.
The appellant, M/s. Krishna Fabricators Private Ltd., manufactured steel seats and claimed exemption under Notification No. 91/68-C.E. and Notification No. 61/86-C.E., declaring the seats to be designed for use in automobiles. The appellant argued that the seats were designed for use in various vehicles, including tractors and earth-moving equipment, without any alteration. They cited a precedent where deluxe seats for Ford tractors were granted exemption under similar circumstances.

The Collector of Central Excise, Bangalore, rejected the appellant's claim, stating that "automobiles" did not include tractors and earth-moving equipment, as per the Industries (Development and Regulation) Act, 1951, which classified these under different categories.

2. Interpretation of the Term "Automobiles"
The Tribunal considered whether the term "automobiles" in the exemption notifications included tractors and earth-moving equipment. The Tribunal referred to various legal interpretations and precedents, including the Motor Vehicles Act, 1988, which defines a tractor as a motor vehicle. The Tribunal also noted that the term "automobile" has a broader connotation, encompassing any self-propelled vehicle, including those used for transportation on roads.

The Tribunal emphasized that the term "automobile" in the notifications should be interpreted in a wider sense, covering all variants of vehicles used for transportation. They referred to the principle of "Noscitur A Sociis," which suggests that the meaning of a word is influenced by the context in which it is used. The Tribunal concluded that the term "automobile" includes tractors and earth-moving equipment, making the steel seats eligible for exemption under the notifications.

3. Applicability of the Extended Period of Limitation
The appellant challenged the demand on the grounds of limitation, arguing that the extended period could not be invoked. They pointed out that their classification list, filed as late as 1-3-1988, was approved by the Assistant Collector, indicating that the Department was aware of their activities and had considered them entitled to the exemption.

The Tribunal did not delve deeply into the limitation issue, as they found the appellant had a strong case on the merits of the exemption claim. However, they noted that the appellant appeared to have a good case on the limitation point as well.

Conclusion:
The Tribunal set aside the order of the Collector of Central Excise, Bangalore, and allowed the appeal, granting the appellant the benefit of the exemption under Notification No. 91/68-C.E. and Notification No. 61/86-C.E. The Tribunal concluded that the term "automobile" in the exemption notifications included tractors and earth-moving equipment, making the steel seats eligible for exemption. The issue of limitation was not discussed in detail, but the appellant was deemed to have a good case on that front as well.