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TMI Blog2006 (3) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellant in its growth shop unit (Appeal No. E/3802/90) [sic 3082/90]. There is no dispute over the fact that even this growth shop unit is owned by the appellant in the two other appeals. 2.1 Appeal No. 3745/89 is on the question of rejection of the request to issue licence in respect of the spare parts manufactured in the growth shop which were intended for use of locomotive/rolling stock which according to the appellant, was machinery installed inside their factory premises within the meaning of the notification. 2.2 Appeal No. E/1054/95 is in connection with the demand made by the Collector, Central Excise for a sum of Rs. 4578167.02 only, under Rule 9(2) read with Rule 196(1) of the Central Excise Rules, 1944 and penalty of Rs. 5 lakhs posed under Rule 173Q(1). It was held by the Collector that the benefit of the notification was inadmissible to the appellant. 3. The show cause notices in all these cases were issued mainly on the footing that locomotive/rolling stock by the nature of their installation on rails cannot be described machinery installed within the meaning of the said notification On this reasoning, it was held that the spare parts which were manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as so modified was approved. The appellate Commissioner upheld that order by holding that the appellant was manufacturing the parts of loco wagons such as, axles, wheels, hoop, hubs, axles boxes, brake gears etc. which cannot be regarded for maintenance of plant and machinery which are generally fixed to the earth. It was held that the wordings in notification are quite clear on the subject. 4.1 In these appeals the Tribunal had earlier made a final order on 8-6-1999 [1999 (105) E.L.T. 220 (Tri.)] and relying upon its decision in final order No. E/449/98/B1, dated 27-3-1998 [1999 (105) E.L.T. 220 (Tri.)] it was held that locomotive or rolling stock wagon, bogies are not so placed or put. or fixed in a position and that though a machine may have moving parts to make it functional but such machines themselves do not move. It was held that the notification applied to the machinery installed in the factory and not machinery used in the factory. That order was made in Appeal No. E/3082/90 which has also been set aside and remanded and is a part of the group of these three appeals. 4.2 In Appeal No. E/3745/89, the controversy centered around as to whether the appellant was entitled t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be recovered for removing goods without payment of duty from the appellant's growth shop premises. The Collector was of the view that the products falling under Chapter 87 of the schedule were not covered as machine. As per the Section Note No. (5) of Section XVI of the schedule, they were meant for repair of chine installed inside their factory and hence benefit of the said notification was not admissible to the assessee. It was held that the assessee had wrongly taken permission of the Central Excise authorities under Rule 192 of the Rules by classifying the product under Chapter 84 and that the goods were not used for the desired purpose. It was also held that for recovery of duty under Rule 196(1) of the rules read with the undertaking given by the appellant in AL6 application and the bond executed by them, the demand was not subjected to any time limit. Against the order of the Collector in this appeal (No. E/1054/95), the Tribunal had earlier on 27-4-2001 held that the appellant had misdeclared the goods because wagons cannot be termed as machinery installed in the factory and there fore, the goods which were removed for the purpose of maintenance and repairs of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders. 6. In support of his contentions the learned Senior Advocate relied upon the following decisions: - (i) The decision of Hon'ble the Supreme Court in Government of India v. Citedal Fine Pharmaceuticals reported as 1989 (42) E.L.T. 515 (S.C.) was cited for the proposition that in the absence of any period of limitation it was settled that every authority is to exercise the power within a reasonable period which would depend upon the facts of each case. (para6). (ii) The decision of this Tribunal in Collector of Customs, Madras v. T. V. S. Whirlpool Ltd., reported as 1996 (86) E.L.T. 144 (Tribunal) in which Citedal Fine Pharmaceuticals (supra) followed was cited to point out from Para 4 of the judgment that this Tribunal had in a number of cases where demands were raised under Rule 57-I at a time when no period was prescribed for recovery of modvat credit has held that, the reasonable period of limitation would be six months or five years depending upon whether there was any suppression of facts involved or not. It was pointed out that the Hon'ble the Supreme Court in Civil Appeal Nos. 7229-7309/97 filed against the said order of the Tribunal dismissed the appeals finding n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how whether they were actually used. It was not known whether there was other machinery in which the parts could be used in the premises where locomotive and wagons were placed on rails. Moreover, it was also not known whether locomotive and wagons moved out of the factory premises. Since all these facts were not proved by the appellant by bringing any material on record, they were not entitled to claim any exemption under the notification in respect of the spare parts manufactured by the appellant in its growth shop unit. It was also submitted that the word "installation" in the field of central excise was understood to mean actual installation. He referred to the concept of installation capacity of machines in Section 3A of the Act, in support of his contention. He submitted that though "trucks" were not the issue, the appellant had in the appeal memo referred to trucks, besides locomotive and rolling stock, as machinery installed in their factory. However, at the time when he raised this contention, the learned senior advocate made it clear that trucks were not the issue at all in these appeals and that no such claim is being made by the appellant even if preferred in the 'memo. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 10-9-1987, a copy of which is on record, it was after a lot of deliberation in their department, the classification list was re-submitted (as per the direction of Superintendent of Central Excise, Adityapur on 18-4-1987), maintaining' their stand of classifying the goods under chapter 84, "except the parts of loco motive of rolling stock which came under chapter 86". Thereafter, the impugned classification list was filed on 22-5-1986. These facts were pointed out by the appellant in support of their defence that there was no delay in the filing of the classification list. The classification list filed by the appellant gave particulars of the goods at item of 1(iv) classifying them under sub-heading 8607.00 in the following terms:- Sl. No. Full description of each Chapter of the goods produced, manufactured or warehoused, in-cluding specification, e.g. size, number of counts in case may be put together with the description as would appear in the invoices. Chapter Heading No. and sub-heading No. of the schedule to the Central Excise Tariff Act, 1985 under which the goods fall. 1 2 3 1. (iv) Parts of Loco, wagon and Rolling stock items vis:- (a) Axles, wheels, wheel sets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the said notification which reads as under :- "24th April, 1986 Notification No. 281 /86-CENTRAL EXCISES In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts all excisable goods manufactured in a workshop within a factory and intended for use in the said factory or in any other factory of the same manufacturer, for repairs or maintenance of machinery installed therein, from the whole of the duty of excise leviable thereon which is specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986). Provided that where such use is in a factory of a manufacturer, different from his factory where the goods have been manufactured, the exemption contained in this notification shall be allowable subject to the observance of the procedure set out in Chapter X of the Central Excise Rules, 1944". 11. The exemption granted under this notification extends to "all excisable goods" manufactured in a workshop within a factory which are intended for use in that factory or any other factory of the same manufacturer. The benefit accrues on the basis of such excisable goods being "intended for use" a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could aid be of a machine, vehicle or animal (see the New Oxford Dictionary of English). 12.1 Much confusion appears to center around note (5) of Section XVI which reads as under:- "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". It is evident from the above note that the expression 'machine' is defined only for the purposes of the notes and not for the purposes of the other provisions contained in the schedule to the Tariff Act. The word 'machine for the purposes of these notes, refers to the remaining notes of Section XVI and as it would be noticed, the word 'machine' occurs at several places in note Nos. 2 and 3 in the context of parts of machine and composite machine. Therefore, there is no scope for extending the said meaning of the word machine, which is adopted for the purposes of the notes contained in Section XVI, to other chapters or to infer from the existence of this note that anything that falls in other chapters would not be ma chine. Therefore, the reasoning adopted by the authorities below for holding that the excisable goods fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,' by Centax Publications Pvt. Ltd., that while reproducing this notification on page 1.143, they have included this heading without mentioning or indicating that it was not a part of that notification. Both the learned senior advocate for the appellant as well as the learned Authorised Representative for the department have stated that this heading is not a part of the original notification a copy of which is separately placed on record. The fact that this heading is not a part of the original notification is also evident from similar heading given by another publisher Taxmann Allied Ser vices Pvt. Ltd., which we have noted from Taxmann's Central Excise Tariff 1990- 91 at page A-116 which reads: "Goods produced and used within same factory or other factory of same manufacturer for repairs or maintenance of machinery", which is different from the heading given to that notification in the publication of Centax Publications Pvt. Ltd., which reads as under :- The juxtaposition in which this heading occurs in the publication of Centax Publications Pvt. Ltd., as added in the notification by the publisher has a misleading effect and gives an impression as if this heading is a part of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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