1996 (12) TMI 228 - AT - Central Excise

Summary

Issues: Excisability of prime mover in a monobloc pump under the Central Excise Tariff Act, 1985.

In the appeal before the Appellate Tribunal CEGAT, New Delhi, the issue revolved around the excisability of the prime mover made of rotors and stators in a monobloc pump. The Revenue contended that the prime mover in the monobloc pump should be classified as an electric motor under Heading No. 85.01 of the Central Excise Tariff Act, 1985. On the other hand, the respondents argued that the prime mover, mounted on the same shaft as the pump, did not constitute an electric motor as commercially understood. The Collector of Central Excise (Appeals) had ruled in favor of the respondents, citing trade notices and ministry clarifications to support the classification of the prime mover differently from an electric motor.

The main argument presented by the Revenue was that the prime mover in the monobloc pump performed the same function as an electric motor and should be classified as such under the relevant tariff heading. Conversely, the respondents contended that the prime mover, being an integral part of the pump's mechanism, did not have a separate existence as an electric motor. They referred to previous Tribunal decisions supporting their stance that in a monobloc pump, only rotors and stators were directly used, and an identifiable electric motor did not come into existence.

Upon careful consideration, the Tribunal analyzed the manufacturing process of the monobloc centrifugal pump by the respondents. The pump utilized stators and rotors in its driving mechanism, which were exempt from duty during the relevant period. The Tribunal noted that while the function of the power mechanism in the pump might resemble that of an electric motor, the critical question was whether this power mechanism could be deemed an electric motor under the tariff heading. The Tribunal agreed that stators and rotors were components of electric motors but concluded that in a monobloc pump where these parts were fixed on the same shaft as the pump, an electric motor as a distinct entity did not come into existence.

The Tribunal referenced a Ministry Circular and previous Tribunal decisions to support its reasoning. The Circular clarified that in cases like monobloc pumps where an electric motor did not exist separately and was not separable due to the common casing and shaft with the pump, classification under electric motors might not be warranted. It emphasized that duty should be levied on rotors and stators as parts of electric motors before their use in manufacturing monobloc pumps but no additional duty should be imposed at the stage of the driving mechanism as electric motors.

Based on the discussion and precedents cited, the Tribunal found no merit in the Revenue's appeal and consequently rejected it.