TaxTMI 
TaxTMI 
2005 (2) TMI 137
X X X X Extracts X X X X
X X X X Extracts X X X X
....l, New Delhi ('CEGAT' for short). 2.The case of the appellant is that it is the manufacturer of power driven pumps and parts thereof designed for handling water. The power driven pumps as well as parts thereof which are used for manufacture of pumps have been exempted from levy of excise duty since 1978. Various notifications had been issued from time to time granting exemption to both, i.e. power driven pumps and also parts of power driven pumps which were used in the manufacture of the power driven pumps. Parts of power driven pumps which were not utilized for manufacture of power driven pumps within the factory, were, however, outside the purview of exemption and they were subjected to levy of excise duty. 3.According to the appellant,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....manufacturing power driven pumps within the factory would continue to be exempted from payment of excise duty. 4.Unfortunately, however, show cause notices were issued by the Assistant Collector, Central Excise, Division-I, Ghaziabad on October 3, 1994 and October 24, 1994 alleging therein that the appellant had cleared the parts of power driven pumps for use within the factory for the manufacture of submersible power driven pumps during the period between 1st March, 1994 and 21st April, 1994 without payment of duty which was subjected to central excise duty. The said item was exempted with effect from April 25, 1994 and the appellant was, therefore, liable to pay excise duty for the intervening period, i.e. 1st March, 1994 and 21st April,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... About 400 such notifications were rescinded with effect from March 1, 1994 and a consolidated notification was issued incorporating earlier notifications by Notification No. 46/94 on March 1, 1994. In view of the policy since 1978, which was not changed, in 1994, by rescinding several notifications and issuing a consolidated notification exempted items were not made subject matter of payment of excise duty and no demand could be made from the appellant. The Central Government was satisfied about the legitimate grievance voiced by the industries and, accordingly, a notification was issued on April 25, 1994. The subsequent notification was, therefore, merely clarificatory in nature and has to be given retrospective effect. No demand could be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er Item No. 30A of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), and specified in the Table annexed hereto from the whole of the duty of excise leviable thereon. TABLE Power driven pumps primarily designed for handling water, namely:- (i) Centrifugal pumps (horizontal or vertical pumps); (ii) Deep tube-well turbine pumps; (iii) Submersible pumps; and (iv) Asial flow and mixed flow vertical pumps. [vide M.F. (D.R.) Notification No. 57/78-C.E., dated    1-3-1978]" 12.Similar notification was issued on February 10, 1986 being Excise Notification No. 79/1986 as several other notifications. By Notification No. 155/86, dated March 1, 1986 relating to specified goods under Chapter 84, it wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed for manufacturing of pumps within the factory were exempted from payment of excise duty. We are also satisfied that notifications were rescinded and consolidated notification was issued on March 1, 1994 with a view to reduce number of notifications. No demand hence could have been made against the appellant in respect of parts of power driven pumps by issuing show cause notices. The submission of the appellant is well-founded that the Government was satisfied about the policy which was in vogue not to impose excise duty on parts of power driven pumps used in the factory premises for manufacture of power driven pumps and to clarify the position, the subsequent notification dated April 25, 1994 was issued. This is also clear if one reads a....