TaxTMI 
TaxTMI 
2001 (11) TMI 844
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....Excise Act and the appellants were also asked to show cause why penalty should not be imposed on them as per provisions of Rule 173Q of the Central Excise Rules from the total sale value. 3. The proposal of determination of duty on the value of total 889 column assembly and head assembly was to be recovered classifying these goods under tariff item 68, based on the value apportioned from the total value without giving any basis as to how that apportionment was done. The grounds as they appear from the notice are : - "M/s. Johnston Pumps India Ltd. cleared vertical turbine power driven pump-set without payment of Union Excise Duty in terms of Govt. of India's Notification No. 57/78-C.E., dated 1-3-78. These types of power driven pumps consisting of three parts viz., (i) Head assembly (ii) Bowl assembly (iii) column assembly. The main function of the pump is to shift liquids from one point to another or from lower point to higher point by the rotating action of the shaft and the impellers. Thus, it converts mechanical energy into kinetic energy of the liquid and liquid is forced out by great pressure from the point itself. It is only the bowl assembly that performs all ....
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....ower driven pump and would fall under item No. 30A of the First Schedule to the said Act and that the other two parts namely column assembly and head assembly would not fall under Item No. 30A but would be covered by item No. 68 of the First Schedule to the said Act. The assumption is wholly erroneous, untenable, baseless and incorrect. Bowl assembly, head assembly and column assembly together constitute the power driven pumps and the said three parts are the essential parts of power driven pumps. (b) That in the Indian Standard Specification for vertical turbine pumps for clear, cold, fresh water (IS 1710-1972), also it has been clearly stated in paragraph 3.1 that the vertical turbine pumps consist of three elements namely bowl assembly, column assembly and head assembly. In Pump Hand Book, edited by Igor J. Karassik, William C. Krutzsch, Warren H. Fraser and Joseph P. Messina and published by Mc.Graw Hill Book Company, New York (1976 Edition), which is one of the most authoritative books on the subject, bowl assembly, head assembly and column assembly have been described to be the essential parts of power driven pumps. In the American National Standard....
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....nbsp; No power driven pump is manufactured by the appellant save and except on the basis of specific orders placed upon it by its customers. Such power driven pumps and all parts thereof are manufactured as per the specific requirements of the customers as mentioned in the orders concerned. Pumps are tailor-made and are manufactured as per the requirements of the individual pumps of the concerned customers. Such parts are all essential parts of the said power driven pumps and they together constitute the said power driven pumps and individual parts such as the head assembly or the column assembly are not saleable in the market and the same are not and cannot be regarded as goods. (h) Assuming though denying that the individual parts of the said power driven pumps such as the head assembly or the column assembly can be regarded as goods or are liable to duty under item No. 68, the said parts are fully exempt from duty in view of the exemption granted under Notification No. 118/75-C.E., dated 30-4-1975. By the said notification the Central Government has exempted goods falling under Item No. 68 of the First Schedule to the said Act, manufactured in a ....
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....-6-82, the Collector arbitrarily and in gross abuse of the powers conferred upon him passed the said purported order. (m) The Collector erred in imposing pending upon the appellant under Rule 173Q of the said rules. There was no contravention of any of the provisions of the said Act or the said Rules on the part of the appellant and none of the conditions precedent for imposition of penalty under Rule 173Q existed and/or was satisfied and the said purported penalty was levied by the Collector in gross violation of the provisions of the said act arbitrarily. 7. After hearing both sides and considering the material, we find :- (a) The learned Advocate for the appellants took us through lot of technical and scientific material placed on record to submit that the articles in question would be essential components and parts of a power driven pump being manufactured by the appellant and have been used in such pumps. In view of the decision of Jyoti Pumps as relied upon by the learned Commissioner, we would be bound to consider the entities herein to be classifiable under tariff item 68 and not under tariff item 30A. However, in the ....