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TMI Blog2014 (9) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner contravened the provisions of Rule 173-C and 173-F of the erstwhile Central Excise Rules 1944 and, accordingly, a show cause notice dated 24.9.1987 was issued to show cause as to why central excise duty amounting to Rs. 61,710/- for the period 1.3.1986 to 2.4.1986 should not be demanded and recovered from them on clearance of column and shaft assembly and discharge head assembly. Another show cause notice dated 11/12.1.1989 was issued to the petitioner to show cause why duty at appropriate rate on column and shaft assembly and discharge head assembly should not be made upon the petitioner. The petitioner, being aggrieved by the issuance of the show cause notice, filed Writ Petition No.492 of 1989, which was eventually dismissed by an order dated 16.8.2000, on the ground of alternative remedy. During the pendency of the writ proceedings several show cause notices were issued to the petitioner for various periods ranging from 1.3.1986 to December, 2000. After the dismissal of the writ petition, the petitioner filed a reply to the show cause notices contending that the vertical turbine pump, which is being manufactured by them consist of- (1)bowl assembly (2)column and shaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Act, 1944. The learned counsel contended that since the issue basically relates to the determination and changeability of rate of duty, the Supreme Court alone has the power to decide such issues. The submission of the learned counsel for the petitioner is untenable. In the first instance, from a perusal of the impugned orders, a demand has been raised, the validity of which has been questioned in the present petitions. We are accordingly of the opinion that the petitions are maintainable. Even otherwise, the petitions were entertained and admitted in the year 2005. Affidavits have been exchanged and therefore, at this stage, it would not be appropriate to relegate the petitioner to the remedy of an alternate appeal. This view of ours is in consonance with the principles enunciated by the Supreme Court in Dhampur Sugar Mills Ltd. vs. Union of India, 2000 (122)ELT 333. In the light of the aforesaid, the preliminary objection is overruled. Sri Bharatji Agarwal, the learned senior counsel contended, that a power driven vertical turbine pump is a composite machine consisting of a bowl assembly, column and shaft assembly and a discharge head assembly and that bowl assembly is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the "machine", namely, the bowl assembly performing the principal function and are, therefore, required to be classified under heading 84.13 of the Central Excise Tariff Act. The learned senior counsel further contended that as per Note-4 of Section XVI a "machine", which includes a combination of machines, consist of individual components, which put together are intended to contribute to a clearly defined function, then the combination of machine would be classified in the heading appropriate to that function and, therefore, if Note 4 is applied, all the three components put together are to be classified as a PD pump under heading 84.13. In this regard, the learned counsel placed reliance upon the Board circular No.224/58/96-CX, dated 26.6.1996, which placed reliance upon Note 3 and 4 of Section XVI of the Central Excise Tariff Act clarifying that PD Pump set is classifiable under heading 84.13. In the light of the aforesaid circular, the learned senior counsel contended that the power driven pump consisting of various components when put together are to be classified along with the machines performing the principal function. The learned senior counsel contended that reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function. 4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function converted by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function. 5. For the purposes of these Notes, the expression 'machine' means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of Chapter 84 or Chapter 85." A circular dated 26.6.1996 was issued by the Central Board of Excise and Customs clarifying Note 3 and 4. For facility, the said circular is extracted hereunder:- " Circular No. 224/58/96-CX, dated 26-6-96 [From F.No. 154/16/94-CX.4] Government of India Ministry of Finance(Department of Revenue) Central Board of Excise & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. A perusal of Note 3 and 4 indicates that where composite machines consisting of two or more machines are used to perform complementary or alternative function, the composite machine is to be classified under the heading of "machines", which performs the principal function. Note 5 indicates that for the purpose of these Notes, the expression "machine" means any machine, machinery, plants, equipment, apparatus or appliance cited in the heading of Chapter 84 or Chapter 85. Undoubtedly, in the instant case, the bowl assembly performs the principal function of lifting the water. The other two components, namely, the column and shaft assembly and discharge head assembly enables the bowl assembly to perform as a vertical turbine pump by lifting the water from the deep tube-well. According to the learned senior counsel, by applying Note 3 both column and shaft assembly and discharge head assembly are to be classified as "machines" performing the principal function under heading 84.13 of the Central Excise Tariff Act. Further, under Note-4, the combination of machines consisting of individual components, which put together and intending to contribute a clearly defined function would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charge head and the column and shaft assembly merely keeps the bowl assembly suspended at the appropriate depth so that water could be forced out. From the aforesaid mechanism it is obvious that what is driven by power/energy/electricity is the impeller in the bowl assembly or to put it aptly, the parts of the bowl assembly. The column and shaft assembly and the discharge head assembly provides the casing through which water rushes out. The column and shaft assembly remains stationary and the discharge head assembly merely keeps the column assembly and bowl assembled suspended at the appropriate depth so that water could be forced out. It is thus clear that what is driven by the power is the parts of the bowl assembly. The column and shaft assembly and discharge head assembly remains stationary and are therefore accessories and not "machine". In a vertical turbine pump, energy is supplied by electricity. The electric motor converts the electrical energy into a mechanical energy which is injected through the parts of the bowl assembly, namely, the vanes of the impellers which converts the mechanical energy into kinetic energy making the water move up under pressure built by the im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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