Intermediate excise duty on pump components fails where rotors and stators do not form a marketable electric motor.

Rotors and stators used in manufacturing mono block pumps were held not to emerge as an independently identifiable, separable or marketable electric motor. As the components were assembled with other pump parts into the finished mono block pump, no intermediate excisable electric motor came into existence under the old Central Excise Tariff. The earlier Ministry clarification and related proceedings supported that position. Accordingly, excise duty was not exigible at the alleged intermediate stage, and the Revenue could not disturb the refund granted to the assessee.

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Issues: Whether rotors and stators used in the manufacture of mono block pumps came into existence as independently identifiable electric motors so as to justify levy of excise duty and whether the Revenue was entitled to disturb the refund granted to the assessee.

Analysis: The dispute arose under the old Central Excise Tariff where electric motors and parts of electric motors, including rotors and stators, were separately classifiable under Tariff Item 30D. The record showed that the rotors and stators were manufactured and then assembled with other pump components such as casing, chamber, stuffing boxes and impeller to form mono block pumps, and that an electric motor did not emerge in an identifiable, separable or marketable form. Both lower authorities had accepted that no independently existing electric motor came into being in the course of manufacture of the mono block pump. The Tribunal also noted the earlier clarification of the Ministry and the supporting view taken in related proceedings.

Conclusion: The assessee's stand was accepted, duty was not exigible on the alleged intermediate stage of an identifiable electric motor, and the Revenue's challenge to the refund failed.

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