2000 (5) TMI 505 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 217/85-C.E regarding exemption for parts of internal combustion engines.
2. Whether items used in the manufacture of ball bearings qualify as parts of parts of internal combustion engines for exemption under the notification.

Analysis:
1. The dispute in this case revolves around the interpretation of Notification No. 217/85-C.E. The appellants claimed exemption for cages, rings, and balls used in manufacturing ball and roller bearings under this notification. However, the Central Excise Authorities contended that the exemption was not applicable as the final product was cleared without duty payment under a different notification. The Assistant Commissioner confirmed a duty demand, which the appellants appealed against, conceding the inapplicability of another notification but claiming exemption under Notification No. 217/85. The Commissioner (Appeals) did not consider this claim as it was not raised earlier. The appellants argued that parts of parts are also entitled to the exemption under the notification, citing legal precedents and circulars supporting their position.

2. The Respondents argued that the items in question, used in manufacturing ball bearings, do not qualify as parts of internal combustion engines under Notification No. 217/85. They emphasized that these parts were not cleared for use in internal combustion engines, thus not meeting the notification's criteria. However, the Tribunal found merit in the appellants' arguments. It was established that the items in dispute were indeed parts of parts of internal combustion engines, as they were used in the manufacture of ball bearings, which are components of internal combustion engines. Referring to relevant circulars and trade notices, the Tribunal concluded that parts used in manufacturing component parts eligible for exemption under the notification. Relying on legal precedents and circulars, the Tribunal overturned the lower authorities' decision, allowing the appeal and granting consequential reliefs to the appellants.