2000 (6) TMI 249 - AT - Central Excise

Tribunal upholds decision denying exemption for glass production machinery parts

MOHAN ENGINEERING WORKS Versus COMMISSIONER OF C. EX., MEERUT

MOHAN ENGINEERING WORKS Versus COMMISSIONER OF C. EX., MEERUT - 2000 (120) E.L.T. 389 (Tribunal) Issues Involved:Availability of benefit of Notification No. 281/86 for moulds and moulding equipments manufactured and used captively for glass and glassware production.Detailed Analysis:1. Issue of Benefit of Notification No. 281/86:The appeal centered around the availability of the benefit of Notification No. 281/86 for the moulds and moulding equipments manufactured and used captively by the appellants for the production of glass and glassware. The appellants claimed exemption from duty under this notification, stating that the goods were used for repair and maintenance of machinery. However, the Revenue department issued show cause notices alleging that the goods were excisable and not used for repair purposes, thus demanding duty payment and imposing penalties.2. Contentions and Arguments:The appellants argued that they were entitled to the exemption as the goods were manufactured for captive use in repairing machinery for glass production. On the contrary, the Revenue department contended that the goods were not used captively and were not intended for machinery repair. The Collector disagreed with the appellants' claim, confirming duty payment and imposing penalties.3. Analysis of Notification No. 281/86:The Notification exempted excisable goods manufactured within a factory for use in the same or another factory of the same manufacturer for machinery repair. The Tribunal found that the goods were not used captively by the appellants for machinery repair. Even if the appellants and the glassworks were considered the same unit, the goods did not qualify as machinery repair components. The Collector's on-site inspection confirmed that the goods were not used for captive repair purposes.4. Legal Precedent and Decision:The Tribunal referred to a legal precedent where machined rolls for captive use were granted exemption. However, in this case, the moulds and moulding equipments were not used captively for machinery repair, making them ineligible for the exemption. The Tribunal upheld the Collector's decision to deny the benefit of the notification, confirming the duty demand and penalties imposed, as the goods did not meet the criteria for exemption.5. Conclusion:The Tribunal found no merit in the appeal and dismissed it, upholding the Collector's decision to deny the benefit of Notification No. 281/86. The duty demand and penalties imposed on the appellants for clearing goods without payment of duty were deemed valid, as the goods were not used for captive repair purposes as required by the notification.