TaxTMI 
TaxTMI 
1996 (10) TMI 287
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....essees had claimed exemption in respect of these rotors and stators under Notification No. 65/86-C.E., dated 10-2-1986 (as amended) on the ground that their rotors and stators were parts of power-driven pumps which were primarily designed for handling water. The Asstt. Collector of Central Excise, Coimbatore, had classified these rotors and stators under Heading No. 85.03 of the Schedule to the Central Excise Tariff Act, 1985 (hereinafter referred to as the `Tariff') which covered "parts suitable for use solely or principally with the machines of Heading Nos. 85.01 and 85.02". Heading No. 85.01 covered "Electric motors and generators (excluding generating sets)." Electric generator sets and rotary converters were classifiable under Heading ....
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.... adjudicated the matter, had held that the rotors and stators which were being manufactured by the appellants in that case were separately classifiable under Chapter Heading No. 85 and they were primarily designed to create a motive power and even when this motive power is generated in the monoblock pump, it was to be correctly classifiable under Heading No. 85.03. The Collector of Central Excise (Appeals) had set aside the order of the Asstt. Collector and had taken a view that the rotors and stators were part of the monoblock pump. We have not agreed with the findings of the learned Collector of Central Excise (Appeals) and have held that the rotors and stators even if they are specifically produced for power-driven pumps had to be classi....
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....he decisions under the old tariff are not applicable to the new tariff, we find that this decision is of no assistance in the case of respondents. 10. As we have discussed above, although motivating force is the essential application of the pump, it is not necessary that in all cases both the power part and the motivating part should be together. It is only in the monoblock pump that both motivating force and water drawing part is housed together. 11. The Gujarat High Court in Special Civil Application Nos. 4656/86, 4658/86 & 1139/87, dated 7th September, 1987 in the case of Saga Windel Engineers had recorded at Page 5 of their judgment as under : "In view of the above, it is now obvious that the rotors and stators used i....
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....3,43,443.55 on account of electric motors for home consumption and a clearance value of Rs. 6,51,138.50 on account of electric motors "for captive consumption" in the manufacture of monoblock pumps. It was contended by the appellant that the electric motors used for making monoblock pumps could not be taken into consideration when calculating the clearances eligible under Notification. According to the appellant the captive consumption did not amount to clearance. The claim was disputed by the Department, which relied on Explanation V to the aforesaid Notification dated 19 June 1980. The explanation declared: "Explanation V - Where any specified goods (hereinafter referred to as inputs) are used for further manufacture of specified goods....
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.... concession. 5. It is contended before us that the Appellate Tribunal erred in rejecting the submission of the appellant that the goods manufactured by the appellant did not entitle it to the benefit of Explanation 5 of the Notification. It is urged that the goods in question were rotors and stators, that they were integral components of monoblock motors and could not be considered as components of general purpose Motors and therefore fell within the same Tariff Item as monoblock pumps. The question has been considered by the Appellate Tribunal. It is a question of fact and we do not propose to entertain it at this stage. 6. It is then urged that stators and rotors should be considered under Tariff Item 68, which is a residu....