2000 (10) TMI 433 - AT - Central Excise

Summary

Issues:
1. Whether the appellants manufactured parts of textile looms without paying duty and were entitled to exemption under Notification 175/86.
2. Whether the activity carried out by the appellants amounts to manufacture.
3. Availability of Notification 175/86 and the requirement of declaration under Rule 174A.
4. Requantification of duty and penalties based on the determination of manufacture and availability of notification.

Analysis:

1. The Collector found that the appellants manufactured parts of textile looms and cleared them without paying duty, stating they were not entitled to the benefit of Notification 175/86 due to non-compliance with certain requirements. The appellants challenged this decision before the Appellate Tribunal CEGAT, Mumbai.

2. The common advocate for the appellants argued that the activity did not amount to manufacture as they did not have machinery for manufacturing. However, the Tribunal disagreed, holding that the assembling done by the appellants constituted manufacture in some cases, such as assembling parts into sub-assemblies like hammer set, slay set, and timing lattish.

3. Regarding the availability of Notification 175/86, the Collector denied the notification on the ground of lack of declaration under Rule 174A. The Tribunal clarified that there was no such requirement in the notification. The proviso under paragraph 4 exempted certain cases from the requirement of registration as small scale industries, which applied to some appellants based on their value of clearances.

4. The Tribunal ordered the duty payable by the appellants to be requantified based on the determination of manufacture and availability of the notification. Penalties, if applicable, were also to be redetermined. Consequently, the penalties were set aside, and the appeals were disposed of accordingly.

This detailed analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CEGAT, Mumbai, regarding the manufacture of textile loom parts, entitlement to exemption under Notification 175/86, and the requirements for such exemptions.