2000 (1) TMI 433 - AT - Central Excise

Summary

Issues:
Whether trolleys and carts used in the factory for transportation of goods constitute complete machinery under Notification 118/75-C.E., dated 30-7-1975, for exemption from excise duty.

Detailed Analysis:
1. The respondents, manufacturers of nylon filament yarn, used trolleys and carts for transporting goods in the factory without obtaining a Central Excise license. A show cause notice was issued for duty recovery, contending that trolleys and carts were not complete machinery for factory use. The Additional Collector dropped the demand, deeming trolleys and carts not as complete machinery. The Revenue appealed.

2. The Tribunal analyzed the term "complete machinery" under the notification. Referring to the Shorter Oxford English Dictionary, it defined machinery as apparatus applying mechanical power with parts having definite functions. Citing a previous case, the Tribunal concluded that trolleys and carts, used for transportation within the factory, do not qualify as complete machinery. Thus, the respondents were entitled to the exemption, upholding the lower order.

3. Vice President expressed a dissenting view, emphasizing the interpretation of "complete machinery." He argued that trolleys and carts, as standalone complete items, should not be excluded from the notification's benefit. The Vice President suggested a reference to a Larger Bench due to the differing opinions within the Tribunal.

4. The matter was referred to the President for a Third Member's opinion on whether trolleys and carts could be considered complete machinery. The Third Member examined the case and concurred with the initial Tribunal's decision, stating that trolleys and carts did not meet the criteria of complete machinery as per the exclusion clause of Notification No. 118/75.

5. The Majority Order upheld the exemption for trolleys and carts, aligning with the view that they did not constitute complete machinery under the notification. The appeal by the Revenue was rejected based on the consensus of the Tribunal members.

This comprehensive analysis covers the interpretation of "complete machinery" under the relevant notification and the Tribunal's determination regarding the classification of trolleys and carts for excise duty exemption.