Common parlance test for components under excise law excludes supporting structures from capital goods exemption.

Iron and steel structures fabricated in the factory for installing sugar manufacturing machinery were held not to be components of eligible capital goods under Rule 57Q of the Central Excise Rules, 1944. Applying the common parlance meaning of "component", the SC held that a component must be an integral part that forms part of the machinery itself; supporting structures do not satisfy that test. The exemption under Notification No. 67/95-CE was therefore unavailable, and the duty demand was sustained. Later reliance on a CBEC circular did not change the result, and the Tribunal's chapter-heading reasoning was not accepted.

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Issues: Whether iron and steel structures fabricated within the factory and used for installation of sugar manufacturing machinery were components of the eligible capital goods under Rule 57Q of the Central Excise Rules, 1944 so as to qualify for exemption under Notification No. 67/95-CE dated 16.03.1995.

Analysis: The exemption notification was held to apply only to capital goods as defined in Rule 57Q, manufactured in a factory and used within that factory. The assessee's case depended on treating the structures as components of the specified machinery. The Court applied the common parlance meaning of "component" and held that a component must be an integral constituent part necessary to make up the whole article. On that test, the iron and steel structures were found to be supporting items and not parts that entered into the composition of the machinery itself. They were therefore not components of the capital goods specified in Rule 57Q. The Court also held that the later reliance on the CBEC circular could not alter this conclusion, though the Tribunal's reasoning on the chapter-heading point was not accepted.

Conclusion: The structures were not eligible components of capital goods under Rule 57Q and the exemption under Notification No. 67/95-CE was not available; the demand of duty was sustained.

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