1997 (5) TMI 147 - AT - Central Excise

Summary

Issues: Duty liability and exemption eligibility for parts of power driven pumps under specific notifications.

In the case before the Appellate Tribunal CEGAT, New Delhi, the issue revolved around the duty liability and eligibility for exemption of various parts of power driven pumps, such as Bracket, Chamber, Impeller, Stuffing Box, Flanges, etc., under Notification No. 64/86-C.E., dated 10-2-1986 as amended by Notification No. 236/86-C.E., dated 3-4-1986. The dispute arose from the retrospective effect of the amendment to the notification and whether the parts of power driven pumps were covered under the exemption. The Assistant Collector of Central Excise, Nadiad, initially held that the amendment had retrospective effect from 1-3-1986, but this decision was overturned by the Collector of Central Excise (Appeals), Bombay. The appellants sought a decision on the merits of the case.

Upon careful consideration, the Tribunal noted that prior to the introduction of the new Central Excise Tariff, the parts of power driven pumps were exempt from duty. Subsequently, under Notification No. 64/86-C.E., dated 10-2-1986, power driven pumps were subjected to concessional rates of duty without specific mention of the parts. However, through an amending notification, No. 236/86-C.E. dated 3-4-1986, exemption was granted to the parts of power driven pumps primarily designed for handling water, subject to certain conditions. The Tribunal acknowledged that these conditions were met in the case at hand.

The Tribunal referenced the Central Duties of Excise (Retrospective Exemption) Act, 1986, which deemed notifications issued between specific dates to have effect from 1-3-1986. The Act aimed to preserve existing duty structures and correct unintended changes in duty rates. In this context, the Tribunal concluded that the parts of power driven pumps had enjoyed exemption before 1-3-1986 and that this exemption was reinstated under Notification No. 236/86-C.E. with retrospective effect from 1-3-1986.

Consequently, the Tribunal held that the Collector of Central Excise (Appeals) had erred in his decision. The impugned order was set aside, and the original order by the Assistant Collector of Central Excise, Nadiad, was restored. As a result, the appeal filed by M/s. Saga Electricals Pvt. Ltd. was allowed in favor of the appellant, confirming the eligibility for exemption of the parts of power driven pumps under the specified notifications.