1984 (8) TMI 339 - AT - Central Excise

Tribunal upholds ruling on Central Excise clearance limit dispute under Notification No. 80/80-C.E.

The Tribunal upheld the Collector of Central Excise (Appeals) decision, ruling that the appellants exceeded the clearance limit under Notification No. ... - Issues:Determining eligibility for exemption under Notification No. 80/80-C.E. for a specific period based on preceding year's clearances.Analysis:The appeal before the Tribunal revolved around whether the appellants exceeded the clearances stipulated under Notification No. 80/80-C.E. during the period from 1-4-1980 to 31-3-1981, thereby impacting their entitlement to the concession under the notification for the subsequent period from 1-4-1981 to 30-9-1981. The notification provided exemptions to small scale manufacturers from Central Excise duty, subject to certain conditions. The key conditions included limits on the aggregate value of clearances of specified goods in the preceding financial year. The appellants had availed of the exemption but were issued show cause notices for allegedly exceeding the clearance limits, leading to a dispute. The Assistant Collector and the Collector of Central Excise (Appeals) had differing decisions on the demands raised, with the latter upholding two demands while setting aside one as time-barred.The primary contention during the appeal hearing was whether the Electric Motors used for captive consumption in making Monoblock pumps should be considered in calculating the appellants' clearances for eligibility under the notification. The appellants argued that captive consumption should not be counted as clearance, citing a government decision in a similar case. Conversely, the Department contended that captive consumption equates to home consumption, supported by a Tribunal decision. The crux of the argument centered on whether captive consumption should be excluded based on the Explanation in the notification, which specified conditions for not considering clearances of inputs used in further manufacturing of finished goods under the same item of the First Schedule to the Act.Further, a detailed analysis was conducted on whether the rotors and stators used by the appellants for making Monoblock pumps should be excluded from the clearance value calculation. The appellants argued that these components were specially constructed for pumps and not electric motors, supported by a certificate and a court decision. However, the Tribunal found that the components could potentially be used for electric motors, falling under the broad category of Electric Motors as per Tariff Item 30. The Tribunal also noted the lack of specific figures provided by the appellants to ascertain the exact value of the components used, leading to a conclusion that the clearance limit was exceeded.The Tribunal dismissed the appeal, upholding the Collector of Central Excise (Appeals) decision, as it found that the appellants had indeed exceeded the clearance limit stipulated by Notification No. 80/80-C.E. for the relevant period. The judgment emphasized the broad interpretation of Tariff Item 30 and the lack of conclusive evidence to exclude the components from the clearance calculation. The potential implications on industry practices and concessions under other notifications were also briefly mentioned but deemed unnecessary for the appeal decision.