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TMI Blog1986 (8) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... ets of value of Rs.1,13,750, involving Central Excise duty of Rs. 5,687.50 without applying for or obtaining a Central Excise licence. It was further alleged that they had manufactured and cleared excisable goods falling under Tariff Item No. 68" valued at Rs. 21,54,574.61, involving Central Excise duty of Rs. 1,07,728.75, without obtaining a Central Excise licence, and without observing Central Excise formalities and paying duty. After obtaining the explanation of the appellants and hearing them, the Collector of Central Excise, Delhi, passed an order confiscating the seized goods valued at Rs. 1,13,750 under Rule 173Q, with an option of redemption on a fine of Rs.10,000. He also imposed a penalty of Rs.50,000 on the appellants. In addition, he demanded excise duty amounting to Rs. 1,07,728.75 on goods held to have been removed by them without payment of duty. 3. In appeal, the Central Board of Excise and Customs upheld the Collector s order so far as the classification and duty were concerned. It, however, remitted the penalty of Rs.50,000 and reduced the fine to Rs.2,500. 4. Appearing before us for the appellants, their learned advocate, Shri M. Chandrasekharan, submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing cobbles or boulders, it is impossible to jet down the wellpoints and they have to be placed in boreholes or holes formed by a puncher with consequent increase in installation costs. The use of a puncher can compact the soil around wellpoint, thus reducing its capacity. The filter wells or wellpoints (Fig. 11.11) usually consist of a 1 m long and 60-75mm diameter gauze screen surrounding a central riser pipe. Where wellpoints are required to remain in the ground for a long period, e.g. for dewatering a dry-dock excavation, it may be economical to use disposable plastic wellpoints. These consists of a nylon mesh screen surrounding a flexible plastic riser pipe. Water drawn through the screen falls in the space between the gauze and the outside of the riser pipe to holes drilled in the bottom of this pipe and thence to the surface. The wellpoints are installed by jetting them into the ground, when the jetting water flows freely from the serrated nozzle. Various proprietary systems concentrate the jetting water through the nozzle rather than allowing it to be dissipated through the filter. The capacity of a single wellpoint with a 50 mm riser is about 10 1/min. Their spacing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies for pumps. Since these were made of plastics, on which duty had already been paid, they were exempt from duty under Notification No. 68/71-C.E., dated 29.5.1971 as amended. Again, since the turnover of the other goods manufactured by the appellants and falling under Tariff Item 68 was less than Rs. 30 lakhs, they were entitled to exemption from duty on these articles also under Notification No. 176/77-C.E., dated 18.6.1977 as amended. 8. Shri Chandrasekharan cited the decision of the Tribunal in the case of Carbon Industries Private Ltd. v. Collector of Central Excise, Madras, reported in 1985 (19) E.L.T. 435. In that case, it had been held that the supply of different components of wet cells in unassembled condition did not amount to manufacture of the complete sets. On this analogy, Shri Chandrasekharan submitted that in the present case, they could not be said to have manufactured complete dewatering systems. 9. For the Department, Shri Doiphode referred to the Board s finding that what were manufactured were dewatering systems . He referred to Tomlinson s book (quoted in para 6 above). The last sentence reads as follows:- The normal set of wellpointing equipment com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c description of the goods involved. From the detailed statements submitted by the appellants to the Collector in their letter, dated 26.2.1980, after the personal hearing before him, it appears that what the appellants themselves manufactured were water handling centrifugal pumps, and accessories (of plastics) for those pumps. The nature of the excisable goods falling under T.I. 68" valued at Rs. 21,54,574.61 is not clear either from the show-cause notice or from the above-mentioned letter. 16. Although the show-cause notice was worded as above, in the Collector s order it was assumed that the appellants were engaged in the manufacture of dewatering system . The further discussion in the Order-in-Original centred on the question of set-off of duty in terms of Notification No. 178/77-C.E., dated 18.6.1977, and on the argument that the value of bought-out items like diesel engines and electric motors should be excluded. Again, in the Board s Order-in-Appeal, it was held that the appellants had manufactured goods known as dewatering systems in the trade. There is no discussion leading to this finding. The only other contention of the appellants which was discussed (and rejected) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the site. 19. We may also observe that even if it were established that the installation at the site was carried out by the appellants, a question would arise whether this would render the articles liable to duty as a set at the time of removal from the factory. However, in the view we have already taken, there is no need to go into this question. 20. We, accordingly, hold that the finding of the lower authorities that the appellants had manufactured and cleared dewatering systems is not sustainable, and we set aside this finding. 21. The fact remains that the appellants had admittedly manufactured certain excisable goods. According to the statements enclosed with their letter, dated 26-2-1980 to the Collector, they manufactured centrifugal pumps, primarily designed for handling water, valued at Rs.4,10,500; and accessories valued at Rs. 19,72,699.25. They had also bought plastic articles valued at Rs.28,71,375.36, which were further machined by them where necessary. Before the Collector as well as before the Board, they had argued that the goods manufactured by them were entitled to exemption from payment of duty. In the absence of their replies to the show-cause notice, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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