1999 (10) TMI 278 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 16/86-C.E., dated 1-3-1986 regarding the availability of benefits to crankshaft used in compressors.

Analysis:
The appeal filed by M/s. Shriram Refrigeration Industries Ltd. raised the issue of whether the benefit of Notification No. 16/86-C.E. is applicable to crankshafts used in compressors. The notification exempts parts of gas compressors and water coolers if used in manufacturing compressors or water coolers, subject to specified procedures. The appellants cited the case of Jain Engineering Company v. Collector of Customs, where the Supreme Court emphasized that exemptions should not be excluded for parts included under another heading if the notification grants exemption to parts of specific engines. In this case, the description in the notification explicitly grants exemption to parts of gas compressors, including crankshafts, as long as they are considered part of compressors.

The Assistant Collector denied the benefit of the notification to crankshafts classified under a different heading, stating that the notification only applied to parts classified under specific sub-headings. The Collector (Appeals) differentiated this case from the Jain Engineering case, emphasizing that the notification in question clearly specified the headings/sub-headings eligible for exemption. Referring to the Supreme Court's decision in Hansraj Gordhandas v. H.H. Dave, it was highlighted that taxing statutes must be interpreted based on their clear language without room for interpretation. Therefore, the Collector's decision to deny the appeal was upheld as the notification's intention was deemed clear in providing exemptions only to parts falling under the specified headings/sub-headings.

In conclusion, the Tribunal agreed with the Collector (Appeals) that the specific headings/sub-headings mentioned in the notification determine the eligibility for exemption. The decision in Jain Engineering case, which focused on specific engine parts, was deemed inapplicable as the current notification clearly outlined the parts eligible for exemption. Following the principle that taxing statutes must be strictly interpreted based on their language, the appeal was rejected, affirming the Collector's decision.