1997 (12) TMI 200 - AT - Central Excise

benefit under Notification No. 118/75-C.E , Notification No. 118/75-C.E , Notification No. 118/75-C.E , Notification No. 118/75-C.E

Summary

Issues:
Whether four specific items manufactured by the appellants, utilized within their own factory, are entitled to the benefit of Notification No. 118/75-C.E., dated 30-4-1975.

Analysis:
The dispute revolved around whether the Turn-Over Unit, Billet Feeding Arrangement, Sprue-Cutting Device, and Scissors Lift manufactured by the appellants were eligible for the benefit of Notification No. 118/75-C.E. The adjudicating authority had denied the benefit based on the argument that these items were complete machinery for producing or processing goods, falling under the proviso to the said Notification. The Turn-Over Unit was considered material handling equipment vital in processing goods, the Billet Feeding Arrangement was seen as a material handling equipment with a specific role in manufacturing, the Sprue-Cutting Device was deemed essential for producing cast materials, and the Scissors Lift was crucial for manufacturing processes at different heights. The appellant argued that none of these items constituted "complete machinery" as per the proviso to the Notification.

The appellant contended that the machines did not bring about any change in the goods they handled and were not involved in producing or processing goods. The appellant relied on the definition of "machinery" from a previous case to argue that each machine was individual and not a group of machines, thus not meeting the criteria of "complete machinery" under the proviso to the Notification. The respondent, however, argued that each machine performed a specific function crucial in the manufacturing process, contributing to the final product, and thus fell under the proviso to the Notification.

The Tribunal agreed with the appellant's interpretation, emphasizing that the proviso to the Notification must be strictly construed as an exclusion clause. The Tribunal noted that while the term "complete machinery" could apply to individual machines, the key consideration was whether the machines were meant for producing or processing goods. After evaluating the functions of the Turn-Over Unit, Billet Feeding Arrangement, and Scissors Lift, the Tribunal concluded that these machines did not alter the goods they handled and were not involved in processing or producing goods. Therefore, they were entitled to the benefit of the Notification. Regarding the Sprue-Cutting Device, the Tribunal agreed that since sand-mould was not considered goods, the device did not process goods and thus also qualified for the Notification's benefit. The appeal was allowed, with no duty liability or penalty imposed on the appellants.