1997 (9) TMI 253 - AT - Central Excise

Summary

Issues:
- Appeal against order passed by Collector (Appeals) regarding duty payment and refund claim for Multi Cylinder Pumps under Notification No. 217/85.

Detailed Analysis:

1. Duty Payment and Refund Claim:
The appeal was filed by the Appellants challenging the rejection of their refund claim by the Assistant Collector and Collector (Appeals) concerning the removal of 380 pieces of Multi Cylinder Pumps. The Appellants had paid duty for these pumps and subsequently filed a refund claim for 200 pumps under Notification No. 217/85, claiming exemption. The claim was rejected due to non-compliance with Chapter X procedure. However, for the remaining 180 pumps, no refund claim was filed as the buyer had availed Modvat credit benefit.

2. Exemption under Notification No. 217/85:
The Notification provides an exemption for component parts of diesel oil-operated internal combustion engines intended for use in their manufacture. The Appellants argued that the 200 pumps in question were covered by the same gate pass as the 180 pumps for which credit was taken. They presented a certificate from the Superintendent of the buyer company confirming that no credit was claimed for these 200 pumps, and they were intended for the manufacture of diesel-operated internal combustion engines.

3. Interpretation of Notification and Procedural Compliance:
The Revenue contended that the Notification must be strictly interpreted, and without specific mention of "parts," no benefit could be extended. They emphasized the requirement of following Chapter X procedure at the time of removal. However, the Appellants argued that proving the intended use for manufacturing diesel-operated engines should be the focus, and procedural irregularities should not negate the exemption if the intended use is established.

4. Decision and Remand:
The Tribunal acknowledged the importance of establishing whether the 200 pumps were received by the buyer company and used in the manufacture of diesel-operated engines. They referred to a previous case where procedural irregularities did not negate benefits when the intended use was proven. Consequently, the Tribunal set aside the previous order, remanding the matter to the Assistant Commissioner for a fresh decision based on the evidence of receipt and utilization of the pumps for manufacturing diesel-operated engines. The Appellants were given the opportunity to provide additional evidence to support their case.

In conclusion, the Tribunal allowed the appeal by way of remand, emphasizing the significance of proving the actual use of the goods for the intended purpose despite procedural irregularities. The decision highlighted the importance of factual evidence regarding receipt and utilization to determine eligibility for exemption under Notification No. 217/85.