Double Excise Duty on Same Machine Not Justified Where CKD Goods Retain Same Description After Attachments

Cone winding machines purchased in CKD condition and already subjected to duty were later fitted with a motor, starter and other attachments to make them functional. On a prima facie view, the excise scheme and the interpretative rule applied did not justify a second levy merely because additions were made, where the goods continued to answer the same description and no new excisable product was shown to have emerged. The appellants therefore established a prima facie case against double duty on the same machine, and waiver of pre-deposit of duty and penalty was granted.

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Issues: Whether, on prima facie examination, the appellants were entitled to waiver of pre-deposit where cone winding machines purchased in CKD condition were subsequently fitted with motor, starter and other attachments, and whether such additions justified a second levy of duty on the same machine.

Analysis: The appellants had purchased the machines in CKD form and duty had already been paid on that form. After purchase, only certain attachments were added to make the machines functional. The scheme of excise levy under the interpretative rule relied upon did not support fastening duty again on the same goods merely because some modifications or additions were made, so long as the goods continued to answer the same description. On a prima facie view, the record did not show that a new excisable product had emerged.

Conclusion: The appellants established a prima facie case that duty could not be charged a second time on the same machine, and waiver of pre-deposit of duty and penalty was granted.

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