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TMI Blog1993 (1) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... re of Immersion Heaters and Room Heaters were exempted from excise duty. He referred to the explanation of the said Notification and pleaded that explanation clearly shows that where the specified goods and inputs are used for further manufacture of specified goods within the factory of production of inputs, clearance of said inputs for such use was not to be taken into account for the purpose of calculating aggregate value of the clearance under Notification No. 175/86-C.E. He said that the Department is reading the said explanation in a different manner inasmuch as explanation has been held to be applicable only in those cases where final product is also being cleared under Notification No. 175/86- C.E. He submits that there is no such condition in explanation (iii), what it simply stipulates is that the final product should be specified goods which are here undoubtedly Immersion heaters and Room heaters. He said that even otherwise the issue is squarely covered by the decisions of the Tribunal in the case of Dukarat Company (P) Ltd. v. Collector of Central Excise, Calcutta, reported in 1987 (29) E.L.T. 446 (Tribunal), wherein while interpreting Notification No. 80/80 which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to in the show cause notice and observe as follows :- Sl. No. C / L No. is with effect from 01. 987/86 01-03-1986 02. - 02-04-1986 03. 740/87 01-04-1987 04. 131/88 01-04-1988 05. 75/89 01-04-1989 06. 04/90 01-04-1990 I find that in all of them Notification No. 160/86 has been mentioned (apart from other notifications). 11. These classification lists show a number of items but the heating elements per se have not been shown as component of immersion heaters or room heaters in any classification list prior to that effective from 1-4-1990. In the classification lists prior to that of 1-4-1990 room heaters and immersion heaters find mention under the sub-heading wholly exempted appliances but not under the heading parts or components. 12. A perusal of these lists also shows that there is a mention of heating elements used in other devices and/or the devices have been shown with the heating elements (and some heating elements have been shown without specifying the device for which they are meant) but room heaters and immersion h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n favour of the department and not the appellants. 19. I may mention that even the department side does not seem to have focused the attention of the Bench on the aspect relating to the conceded portion of duty liability and implications thereof but it is a relevant aspect which was required to be taken into account. 20. Looking to the totality of facts and circumstances and noting the above aspects in particular I see no reason to interfere at this stage as the appellants have not shown sufficient cause. Hence their application is dismissed. 21. In view of the difference of opinion between Hon ble Member (Judicial) and the Vice-President the papers are placed before the Hon ble President for reference to a third Member on the following points of difference; (1) Whether the full facts had been correctly and completely disclosed? and if so whether the case was prima facie a covered case? Whether prima facie case could be said to be in favour of the appellants? (2) Whether in view of the fact that a portion of duty liability has been conceded and the appellants had offered to pay the same, whether an unconditional stay was warranted? (3) Whether looking to the totality of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No. 175/86. It should satisfy the condition of being a specified goods under the notification which condition is satisfied in their case. He also relied upon the Stay Order No. E/147/91-B1 dated 26-7-1991 in the case of M/s. Universal Electrical Industry v. Collector of Central Excise, New Delhi wherein, in similar circumstances, and after noting the precedent decision of the Tribunal relating to Notification No. 80/80, the Tribunal has dispensed with the pre-deposit and stayed recovery. Similarly, in the Stay Order No. E. 331/91-B1 dated 11-11-1991 in the case of M/s. Durable Electricals (P) Ltd. v. Collector of Central Excise, New Delhi, in the similar circumstances, the Tribunal had granted unconditional stay. This was all on a prima facie view of the merits of the case regarding the eligibility to exemption to such captively consumed inputs under the small scale industries exemption notification. The Ld. Counsel, further, submitted that the appellants, herein, had offered to pay duty only on those heating elements, which were cleared as such and not captively consumed and that they were not in a position to quantify the duty because all the related documents were in the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egate value of clearances made by the party. In the minority view, as held by the Member (Technical) in the case of Dukart Co. decision of the Tribunal (supra), it was opined with reference to the Explanation VI of Notification No. 80/80 which is a similar to Explanation III to Notification No. 175/86 with which we are concerned here, that not taking into account the value of clearances captively consumed for the purpose of notification will not mean that these goods are exempted from payment of duty and in the minority view, it was, further, held that exemption in respect of any goods cannot be implied from a notification and goods cannot be held to be exempted unless specifically stated so in the notification. However, the majority view in that case was otherwise and the majority held as follows : There is no dispute that both input varnish and finished product paints and enamels fall under T.I. 14 are goods specified in the notification and fall under Tariff Item of the Central Excise Tariff. Explanation VI added to Notification 80/80 by Notification 123/80 dated 18-7-1980 (which has been reproduced by Brother Gulati in his order) stipulates that where any specified goods r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all not be taken into account for the purpose of calculating the value of clearance under the notification, in my view by directing such exclusion they granted exemption to inputs captively consumed for finished product both falling under the same item." 25. From the above, it is clear that, prima facie, there is force in the claim of the appellants, herein, for exemption for heating elements captively consumed in terms of Explanation III to Notification No. 175/86. The non-disclosure of all particulars by the appellants may have relevance only if the demand is found on merits sustainable and as regards the payment of duty on heating elements as such, the appellants put-forth the plausible explanation in reply to the show cause notice that it was due to want of records which were in the custody of the Department that they were unable to quantify to duty and it has been recorded also in the Collector s order (para 2) that the records pertaining to such sale of heating elements by the appellants effected by the party for the period 1986-87 to 1990-91 had been resumed by the Department. It is also relevant in such a context, as discussed above, that this Bench in granting stay earli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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