No fresh excise duty on fitted bearings where no new excisable commodity emerged from assembly of bought-out parts.

No fresh excise duty could be levied merely because a shaft was fitted to bought-out ball or roller bearings on which duty had already been paid, as that did not create a distinct excisable commodity. The show cause notice was internally inconsistent because it proceeded on facts that did not support manufacture of a new dutiable item. The challenge to the proposed levy succeeded, and the notice could not be used to impose duty again on the same bearings. Prolonged departmental inaction also provided no basis to keep the proceeding alive.

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Issues: Whether a fresh excise duty could be levied on shaft-bearing assembled from bought-out ball or roller bearings and shafts, and whether the impugned show cause notice disclosed any new excisable commodity liable to duty.

Analysis: The petitioners had already purchased ball or roller bearings on which central excise duty had been paid by the manufacturers. The department proposed to levy duty again on the same bearings on the footing that a shaft had been fitted to them. The order holds that, even assuming the allegations in the notice to be correct, no new excisable commodity emerged merely because a shaft was added to the bearings. The notice itself proceeded on a footing inconsistent with the conclusion that a distinct excisable item had been manufactured, and the prolonged inaction of the department also furnished no reason to keep the proceeding pending.

Conclusion: The challenge succeeded and the fresh levy was not sustainable; the notice could not be used to impose duty again on the ball or roller bearings.

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