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TMI Blog2005 (3) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue related to the question of eligibility for benefit of exemption of Notification No. 281/86, dated 24-4-1986 in respect of parts of rolling stock manufactured in the appellant's factory (Growth Shop) at Adityapur and brought to the main steel works at Jamshedpur for use in repair and maintenance of transport equipments used for moving the materials and products within the factory. In the third appeal i.e. C.A. 5209 of 2001 the issue relates to the confirmation of demand of central excise duty amounting to Rs. 44,78,167.02 and imposition of penalty of rupees five lakhs. Here again, the show cause notices proposing imposition of duty and penalty were on the basis that the benefit of aforesaid Notification was not available to the assessee-appellant. The dispute relates to adjudication for alleged contravention of procedures contained in Chapter-X by the consignee, namely, the Main Plant at Jamshedpur. Allegation was that consignee had failed to intimate the actual use of goods received from the Growth Shop at Adityapur. The show cause notice is dated 14-5-1991. 3.The assessee-appellant had applied for permission under Rule 192 of Central Excise Rules, 1944 (in short the 'Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... talled. The term ' installation' does not mean that it should be embedded to the earth only, but it is used in the sense of introduction or induction. It in essence means to set up or fix in position for use or service. It was further submitted that the CEGAT made out a new case relating to applicability of Rule 196 for the purpose of limitation ignoring the fact that the show cause notice and the orders of the Adjudicating Authority and the First Appellate Authority proceeded on the basis that the action in terms of Section 11A(1) (proviso) was being taken. The assessee-appellant was, therefore, deprived of presenting its case. In addition, to invoke the extended period of limitation something more than alleging infraction is necessary. There must be an element of mens rea or wilful disregard. In any event, Rule 196 and Section 11(A)(1) operate in different fields which are to be harmonised. Even if it is accepted for the sake of argument that no period of limitation is indicated in Rule 196, it cannot be conceived that the Legislature permitted action after unusually long period, thereby unsettling the settled position. There was no wilful misstatement and in fact the assessee-ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt relates to excisable goods manufactured in a workshop within the factory and intended for use in the said factory. The second part relates to use in any other factory of the same manufacturer for repair or maintenance of machinery installed therein. The expression 'therein' obviously relates to the other factory of the manufacturer. It is significant to note that heading of the Notification does not refer to installation aspect while body of the Notification does it. In the instant case, there is no dispute that the goods were intended to be used for the purpose of repairs or maintenance of machinery in the other factory of the assessee-appellant. The basic issue, therefore, is whether these machineries were installed in the factory. 11.As per Black's Law Dictionary (Fifth Edition), the word 'install' means " to place in a seat, give a place to; to set, place, or instate in an office, rank, or order, etc. To set up or fix in position for use or service. 12.As per T.P. Mukherjee's Law Lexicon, Fifth Edition, the word 'installed' itself has not been statutorily defined. In view of the extended statutory definition of the word 'plant' in Section 10(5) of the Income Tax Act, 1922 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of "intended or introduced'. As held in Commissioner of Income Tax v. Mir Mohammad Ali (AIR 1964 SC 1693 at 1697 = (1964) 53 ITR 165), installed would certainly mean 'to place an apparatus in position for service or use'. When an engine is fixed in a vehicle it is installed within the meaning of the expression". 17.The said decision was rendered while interpreting Section 10(2) of the Income Tax Act, 1922. The provisions involved were Section 10(2)(vi) and (via). The issue involved in the said case was whether extra depreciation is admissible under the provisions of Section 10(2)(vi) and Section 10(2)(via) of the Act in respect of diesel oil engines fitted to the motor vehicles in replacement of the existing engines. It was held that the expression 'installed' did not necessarily means fix in position but was also used in the sense of inducted or introduced. It was also held that 'installed' would necessarily mean to place an apparatus in position for service or use. It was therefore held that when any engine is fixed in a vehicle it is installed with the meaning of the expression in clauses (vi) and (via) of Section 10(2) of I.T. Act, 1922. 18.If the plant in combination with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... test of it was made until later. (See De Merritt v. Forbes Milling Co., 216 P.1086, 114 Kan. 62). 27.Notwithstanding Civ. Code, pp. 1645, 1654, 1656, providing that technical words in contracts must be interpreted as understood by persons in the business to which they relate, and that in cases of uncertainty a contract must be interpreted most strongly against the party causing the uncertainty to exist, and that all things necessary to carry a contract into effect are implied therefrom, a lease, which required the lessee to "install a sidewalk elevator from the basement to the sidewalk" in front of the premises does not require the lessor to prepare the premises for the installation of the elevator; but the lessee must provide a suitable lift with the usual accessories connecting the basement with the sidewalk; the word "install" meaning to set up or fix in position for use or service. (See Metzler v. Thye, 124 P. 721, 722, 163 Cal. 95). 28.As the words 'install' or 'installed' go to show, much would depend upon the context in which the expression is used in a particular statute and no generalisation can be done. 29.The benefit of the exemption is available under the exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds "installed in the factory" in the Head Note of the Notification. We make it clear that we have not expressed any opinion on the factual aspects of the case. 32.The residual question is, even if it is held that the benefit under the Exemption Notification is not available whether the notices issued can be said to be within the period of limitation. Undisputedly, the Adjudicating Authority and the First Appellate Authority proceeded on the basis as if Section 11A(1) was applicable to the facts of the case. The CEGAT on the other hand was of the view that there was no warrant to impose limitation under Section 11A(1) of the Act for raising a demand under Rule 196. That is the subject-matter of dispute in Civil Appeal No. 5209 of 2001. 33.This issue needs to be carefully considered. Rules 192, 196 and Section 11A(1) as they stood at the relevant point of time read as follows : "Rule 192 - Application for concession. - Where the Central Government has, by notification under Rule 8, or Section 5A of the Act, as the case may be, sanctioned the remission of duty on excisable goods other than salt, used in a specified industrial process, any person wishing to obtain remission of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s committed by the applicant, his agent or any person employed by him. In the event of such a breach, the Commissioner may also order the forfeiture of the security deposited under Rule 192 and may also confiscate the excisable goods, and all goods manufactured from such goods, in store at the factory. (2) Where the duty becomes chargeable in terms of sub-rule (1) on any excisable goods, the rate of duty and the tariff valuation, if any, applicable to such goods shall be the rate and valuation in force - (i) in the case of actual removal of goods from the premises, on the date of such removal; (ii) in the case of loss of goods in transit during transport from the place of procurement to the applicant's premises, on the date on which the goods are received in the applicant's premises; (iii) in the case of goods while in storage or during handling in the premises approved under Rule 192, on the date on which such loss is discovered by the proper officer or made known to him; (iv) in all other cases, on the date on which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd all goods manufactured from such goods in store at the factory. In other words, Rule 196 deals with a situation of withdrawal for a concession. If any concession has been wrongly or illegally availed Rule 196 permits the proper officer to demand payment of duty leviable on the concerned goods. 35.Section 11(A) on the other hand deals with recovery of dues not levied or not paid or short levied or short paid or erroneously refunded. 36.In the instant case, the authorities themselves proceeded on the basis that the case is covered under Section 11A. The CEGAT introduced a new case of Rule 196 without affording any opportunity to the assessee to have its say on this score. 37.We find that the whole issue has been considered bypassing the real issue. The show cause notice refers to adjudication for contravention of Chapter X procedure by the Main Plant at Jamshedpur (hereafter referred to as the 'consignee'). According to the show cause notice, the said consignee had failed to intimate the actual use of goods received from Growth Shop, Adityapur. 38.It has to be noted that the show cause notices of 1987 dealt with breach of Exemption Notification by the consignor whereas the sho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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