1999 (8) TMI 254 - AT - Central Excise

Summary

Issues:
Eligibility of gauges as per Notification No. 217/86-C.E. for central excise duty exemption.

Analysis:
The appeal pertains to M/s. Indian Pistons Ltd. regarding the eligibility of gauges manufactured and used within their factory for measuring final products. The Collector of Central Excise (Appeals) Madras had categorized the gauges as apparatus/tools used for processing final products, thus excluded from duty exemption under Notification No. 217/86-C.E. The appellants sought a decision on merits, referencing a Tribunal decision in a similar case.

The Tribunal noted that the gauges were admitted to be used in manufacturing final products to meet required specifications, leading to modifications during production. The appellants argued that the gauges did not change substances during manufacturing. However, the Tribunal emphasized that the gauges were apparatus/tools used for producing or processing goods, falling under the exclusion clause of the notification. The gauges were crucial for ensuring precision in the final products, aligning with the notification's explanation.

Referring to the Tribunal's decision in the case of Maruti Udyog Ltd. v. C.C.E., New Delhi, it was established that equipment manufactured and used within the factory for specific final products, even without altering the product, were excluded from the notification. The Tribunal clarified that equipment used for processing goods related to manufacturing final products fell outside the notification's scope.

Additionally, the Tribunal cited the case of Ashok Leyland Ltd. v. C.C.E., Madras, supporting the exclusion of equipment used in the manufacturing process from duty exemption. Considering the facts and the admitted use of gauges in manufacturing final products, the Tribunal upheld the Collector of Central Excise (Appeals) Madras' decision, rejecting the appeal based on the gauges' eligibility for duty exemption under Notification No. 217/86-C.E.