TaxTMI 
TaxTMI 
1990 (3) TMI 76
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....1967 as claimed by the Petitioners. (ii) The Order of the Customs, Excise and Gold Control Appellate Tribunal, New Delhi, dated 8th August 1989 in Appeal No. 3116/88 whereby the demand of excise duty of Rs. 36,55,234.80 and penally of Rs. 10 lakhs imposed by the Respondent No. 1 was upheld. 2. The facts out of which this petition arises are briefly as under : On 6th May 1975, the Respondent No. 2 advised the Petitioners that rubber products known as "aprons" and "cots" manufactured by them are exempt from excise duty under the Notification No. 197/67 issued by the Central Government. The Petitioners' products were thus exempted from excise duty. Yet a notice dated 24th September 1980 seeking to levy such duty was issued which was impugned by the Petitioners in Writ Petition No. 1193 of 1980. The Respondent No. 1 stated before this Court that "the Order, if any, made after the disposal of the show cause notice will not be enforced for a period of 15 days from the receipt of the same" by the Petitioners. In view of this statement, the Writ Petition No. 1193 of 1980 was withdrawn. On 21st May 1981, an adjudication pursuant to the show cause notice dated 24th September 1980....
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.... at Thane rubber pipes and tubes which are cut into smaller parts known as "aprons" and "cots". The process consists manufacturing long rubber pipes/tubes and then cutting small pieces out of them only in such a manner that their cylindrical character is always retained. The aprons and cots come into existence upon the cutting of the larger tubes/pipes into small cylindrical pieces known as aprons\cots. Aprons and cots are components of textile machinery [1]. Excisable goods are the goods specified in the First Schedule to the Act [2]. Excise duty is leviable on all excisable goods (except Salt) which are "produced or manufactured in India" at the rates set forth in the First Schedule [3]. The word "manufacture" includes any process incidental or ancillary to the completion of the manufactured product [4]. The definition sets down what manufacture includes, with reference to certain specified items, such as tobacco products, medicines and so on. But in respect of rubber products such specification has not been made. Nevertheless, by virtue of Section 3 of the Act, all excisable goods produced or manufactured in India attract excise duty from the manufacturer or the producer. Sectio....
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.... product has to be "piping and tubing". Secondly, such piping and tubing has to be (a) designed as component parts of machinery or (b) such piping and tubing is converted in the factory of its production into component parts of the machinery. Thirdly, such product should not perform function of conveying air, gas or liquid. 7. A pipe is a long hollow cylinder used for conducting a fluid, gas or finely divided solid and for structural purposes [8]. Its primary purpose is to conduct or convey gases or fluids. It could be a tubular or cylindrical object, part or passage [9]. The word "piping" is the gerund or verb-noun of pipe. "Tube" is a hollow elongated cylindrical body that is used to convey fluids and is mechanically nearly or precisely the same as a pipe [10]. In substance Pipe and Tube have the same meaning and are used interchangeably. The word "tubing" signifies gerund of "tube". 8. Thus, piping and tubing are the verb-nouns of pipe and tube respectively. Although pipings and tubings are essentially conveyors of fluids and gases, they are adaptable to different purposes. The adaptation to a particular purpose determines their functional identity. For instance, ....
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....the other hand, "accessory" has altogether different connotation. It signifies aiding or contributing in a secondary or subordinate way. It is used to denote a role or status which is supplementary or secondary to something of greater or primary importance. The word "accessory" is used to suggest that something or somebody is incidental to the main subject. In other words, accessory is something which is inessential and secondary or subordinate to another object [13]. While "component" is always an essential element of a machine, an accessory is an aid to the machine. A machine is not a machine without a component. But a machine can perform without a given accessory. The meaning of the words "component" and "accessory" and the distinctions between them are known to the Respondents Nos. 1 and 2. They have examined the use of aprons and cots. That is why the character of aprons and cots as components of textile machinery was never in dispute. That is why in his notice dated 30th September, 1981 the Respondent No. 1 observes :"It is observed that synthetic rubber aprons and cots are essentially textile machinery component parts. They are also distinctly known as such and are mar....
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....he Assistant Collector and Collector have accepted Aprons and Cots as components of Textile Machinery. Then the Collector refers to the Judgment of the Customs, Excise and Gold (Control) Appellate Tribunal in INARCO Limited, Bombay v. Collector of Central Excise -1987 (31) E.L.T. 469 (Tri.) [17]. The Tribunal has not held that Aprons and Cots are accessories. Yet the Collector relying upon the two publications of Indian Standards Institution concludes that Aprons and Cots are accessories. In our opinion, the two publications do not suggest that Aprons and Cots are accessories. The function performed by Aorons and Cots is of gripping the fabric and the Aprons and Cots are accepted as components of machinery. 12. Learned Counsel for the Respondents relied upon the Supreme Court's judgments in Tata Oil Mills Co. Ltd. [18] and Parle Exports (P) Ltd. [19]. The thrust of his argument based on these decisions was that the object and purpose of the exemption and the nature of the actual process involved in the manufacture of the commodity should be kept in mind. Now, the purpose of the exemption is to promote the industry which is required to use pipings and tubings conve....
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....ar, J.] : - 16. I am in complete agreement with the judgment of my brother Judge Guttal, J. I am writing this short separate judgment only with a view to pinpoint certain additional anomalies and features of the proceedings which are the subject matter of this Petition. 17. It is not necessary to state the facts which are fully set out in the judgment of my brother Judge. From that statement, it will be seen that the Order passed by the Assistant Collector dated 21st May, 1981 was not one which could admit of any "stay" as such. While trying to have a second look at the Order of the Assistant Collector dated 21st May, 1981, holding that cols and aprons produced by the Petitioners were exempted from excise duty, the Assistant Collector stayed the operation of the Order. Such stay is meaningless. You can have stay of an order which purports to start doing something or results in the starting of doing something. In a Plaintiff's suit for possession, the Court may pass a decree for possession and the Appeal Court might be inclined to stay the execution of that decree. But if the Court dismisses the Plaintiff's suit for possession, there will be no question of anything being staye....
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.... the articles should not be held accessories rather than component parts. I make it clear that if such a view was taken even after the show-cause notice, it would have been impossible for us to agree with the view. The reasons for this are already stated in the accompanying judgment. The point is that such a view could not be taken by the Collector against the party, to whom he has sent the show-cause notice, after stating unequivocally that the goods were very much of component parts. The controversy set up later on was as regards the two positions, whether they were component parts or accessories. If the Collector had notified to the Petitioners that they were component parts, he could not have turned out at the fag end of the proceedings and held in the judgment that they were not component parts but were accessories and that too by relying upon certain classification mentioned in the I.S.I. Specification No. 4692-1968 for "Synthetic Rubber Aprons (Reinforced for Drafting Systems)". If the Petitioners had the notice about this paticular changed view point of the Collector, they would have lead evidence to show that the authority did not intend to include aprons and cots in the c....