9911796707
TMI Blog1998 (12) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 1-3-1986 (sic) as amended by Notification No. 312/86 dated 20-5-1986. The said notification exempts, inter alia, filter elements inserts and cartridges as parts of accessories of motor vehicles, tractors (including agricultrue) provided it is proved to the satisfaction of the Proper Officer that the said goods are intended to be used as original equipment parts in the manufacture of internal combustion engine falling under Chapter 84 of the said schedule and when such an use is elsewhere than in the factory of production of the said goods the procedure set out in Chapter X of Central Excise Rules, 1944 is followed. The undisputed facts of the case are that the present appellants manufactured Filter Elements and thereafter removed the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d then this filter assembly is sent to manufacturer of I.C. Engines. 4. Heard learned Advocate Shri R.C. Kumar for appellants, on 8-10-1998, wherein the Bench asked the learned Advocate to clarify as to whether inserts were being granted benefit of modvat now, what was the pattern of clearance of inserts ; and whether it is now not cleared to OE manufacturers that is of I.C. Engines and the matter was adjourned on his request. Learned Advocate did not appear when the matter was called on 25-11-1998. Instead, he submitted a written memo for arguments on 4-11-1998 wherein he reiterated that the appellants are unable to state whether modvat credit was availed during the disputed period since the records pertaining to 1986-87 are not traceab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... main thrust of arguments of the appellants as submitted by learned Advocate during the hearing on 8-10-1998 was as follows :- (i) The filter elements manufactured by them ultimately is used as original equipment by manufacturer of I.C. Engines and is not sold in the open market. For this purpose, Chapter X procedure is used. Therefore, the intention for use in I.C. Engines by original manufacturers prescribed in the said notification is satisfied. (ii) The words intended for use in the said notification should not be interpreted to mean used as the phrase intended for use is a broader phrase than used itself. Therefore, as long as ultimately the elements are used by a manufacturer of I.C. Engines, the conditions of the said not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of I.C. Engines, this is a mere bald statement and is not supported by any technical literature, opinion of experts, affidavits etc. As their claim on facts is not substantiated, there is no merit in it. On the contrary, when notifications are issued by Government for exempting a particular specified product, it is done so after great study, considering the representations received from the industry. Therefore when the Legislative authority in the Government clearly exempted only filter elements intended to be used in the manufacture of I.C. Engines, then that decision must have been based on the recognition of the fact that such an intended use is a commercial reality. It was for the appellants to prove by evidence that it was not so, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the filter assembly. But this is not so. Therefore, we are unable to read into the notification anything beyond what is clearly provided therein as per the settled law in this regard. (4) We are also unable to agree that mere procedural technicalities should not deny the exemption in view of the case laws cited. In this case, we find that the exemption notification is a conditional notification and the procedure of Chapter X is prescribed specifically to ensure that the said condition governing the exemption namely intended use in the manufacture of I.C. Engines is compulsorily followed at the time of removal of these inserts/elements without payment of duty. We find that any procedural requirements spelt-out in a conditional exemption n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case-law therefore stands clearly distinguished on facts and is of no help to the appellants. In view of this, the phrase intended for use in the said notification is not satisfied in this case even if it is given a broader meaning than the word used . We cannot hold that because the filter elements were first used in the manufacture of filter assembly, which was then used in manufacture of I.C. Engines, therefore the said notification is satisfied. This would be even beyond the scope of the phrase intended for use because the said phrase, as already discussed above, was used in the said notification in relation to filter elements/inserts and not some other product. 8. In view of the aforesaid findings, we do not find any merit in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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