Collector of Central Excise, New Delhi Vs. Hindustan Sanitaryware & Industries
EmailAppeal: Civil Appeal No. 1627 of 1994
Civil Appeal No. 6219 of 1994
(From the Judgment and Order dated 1.4.1991 of the Customs Excise & Gold (Control) Appellate Tribunal, New Delhi in E Appeal No. 3841/90-C)
Petitioner: Collector of Central Excise, New Delhi
Respondent: Hindustan Sanitaryware & Industries
Apeal: Civil Appeal No. 1627 of 1994
Civil Appeal No. 6219 of 1994
(From the Judgment and Order dated 1.4.1991 of the Customs Excise & Gold (Control) Appellate Tribunal, New Delhi in E Appeal No. 3841/90-C)
Judges: SYED SHAH MOHAMMED QUADRI & S.N. VARIAVA, JJ.
Date of Judgment: Oct 09, 2002
Appearances:
Mr. R.P. Bhatt, Senior Advocate, Mr. G. Venkatesh Rao, Mr. K.C. Kaushik, Mr. B.K. Prasad, Advocates with him for the Appellant.
Mr. B.D. Ahmed Advocate for M/s. Lawyers Associated.
Head Note:
EXCISE
Notification no. 217/86 (As amended by notification no. 82/87-CE) – Tariff Act, 1985 – Chapter 25 – Sanitary-ware – Use of plaster of paris in making moulds and in turn use of moulds as inputs for final product. Held the exemption applies to moulds of plaster of paris. (Paras 7, 8)
JUDGEMENT:
ORDER
1. These two appeals arise from the judgments of the customs excise & gold (control) appellate tribunal in order no. 304/91-C in E/Appeal No. 3841/90-C dated April 1, 1991 and in order no. 600/91-C in E/Appeal no. 2031/91-C dated July 19, 1991. The judgment in order no. 304/91-C in E/Appeal no. 3841/90-C dated April 1, 1991 is followed in order no. 600/91-C in E/Appeal no. 2031/91-C dated July 19, 1991.
2. The respondent, a manufacturer of sanitaryware, uses plaster of paris as inputs for the final product of sanitaryware. The process involves making of moulds from plaster of paris which are in turn used as inputs for manufacture of sanitaryware. The respondent claimed the benefit of exemption under notification no. 217/86 (as amended by notification no. 82/87-CE).
3. In these cases, though the excise authorities declined to grant the benefit of exemption, the customs excise & gold (control) appellate tribunal set aside their orders and held that the exemption would apply to the respondent.
4. Mr. R.P. Bhatt, learned senior counsel appearing for the revenue, contends that as the moulds of plaster of paris are goods classified under the Central Excise Tariff Act, 1985 they cannot be treated as inputs; they must be treated as the final product and as they are exempted, the respondent is not entitled to the benefit of exemption under notification no. 217/86.
5. We are afraid, we cannot accept the contention of the learned senior counsel.
6. The said notification reads as follows:
“SPECIFIED GOODS USED WITHIN THE FACTORY OF PRODUCTION IN THE MANUFACTURE OF FINISHED GOODS.
In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the central government hereby exempts goods specified in column (2) of the table hereto annexed (hereinafter referred to as ‘inputs’) manufactured in a factory and used within the factory of production, in or in relation to the manufacture of final products specified in column (3) of the said table, from the whole of the duty of excise leviable thereon, which is specified in the schedule to the Central Excise Tariff Act, 1985 (5) of 1986):
Provided that nothing contain in this notification shall apply to inputs used in or in relation to the manufacture of final products which are exempt from the whole of duty of excise leviable thereon or is chargeable to nil rate of duty.
Explanation : For the purposes of this notification, “inputs” does not include –
(i) to (iv) xxx xxx xxx
The table
S. Description of Description of
No. Inputs final products
1. Goods classifiable Goods classifiable
under any headings under any
of chapters 28, 29, 30, headings of
32, 33, 34, 35, 36, 37, chapter 28, 29, 30,
38, 39, 40, 48, 70, 72, 32, 33, 34, 35,
73, 74, 75, 76, 78, 79, 36, 37, 38, 39, 40,
80, 81, 82, 83, 84, 85, 70, 72, 73, 74, 75,
86, 87, 88, 89, 90, 91, 76, 78, 79, 80, 81,
92, 93, 94, 95 or 96 82, 83, 84, 85, 87,
88, 89, 90, 91, 92,
93, 94, 95 or 96
(other than those (other than those
falling under heading falling under
nos. 36.03 or 37.05) heading nos.
of the schedule to the 36.03 or 37.05) of
Central Excise Tariff the schedule to
Act, 1985 (5) of 1986) the Central
Excise Tariff Act,
1985 (5) of 1986)
The notification, extracted above, was amended by notification no. 82/87-CE which is as under:
“Exemption to captive consumption of MODVAT items – In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the central government hereby makes the following further amendment in the notification of the government of India in the ministry of finance (department of revenue) no. 217/86- central excise, dated the 2nd April, 1986, namely:
In the said notification for the table, the following table shall be substituted, namely:
The Table
S. Description of Description of
No. Inputs final products
1. 2 3.
1. Goods classifiable Goods classifiable
under any headings of under any
chapters .. 25 (other headings of
than those falling chapters .. 69 ..
under heading nos. (other than those
36.05 or 37.06) of the falling under
schedule to the Central heading nos.
Excise Tariff Act, 1985 36.05 or 37.06) of
(5) of 1986) the schedule to the
Central Excise Tariff
Act, 1985 (5) of
1986)
7. A perusal of the notification as amended by notification no. 82/87, extracted above, shows that the description of inputs given in column (2) under chapter 25, would be ‘plaster of paris’ and the final product given in column (3) under chapter 69 would be ‘ceramic goods’.
8. The proviso postulates a situation where the final product itself is exempted in which case alone the exemption of plaster of paris under notification no. 217/86 cannot be availed. It is nobody’s case that the sanitaryware falling under chapter 69 has been exempted by the central government. What is exempted is plastic moulds but they are only inputs and not final product in this case. This fact is further clarified by the central government in notification no. 221/86, as amended by notification no. 89/89. Item 6 thereof clearly mentions that plaster of paris moulds are input for ceramic products.
9. From the above discussion, it follows that plaster of paris which is used as inputs in relation to the manufacture of sanitaryware (final product), is exempt under notification no. 217/86 dated April 2, 1986, as amended.
10. In this view of the matter, we do not find any illegality in the orders under challenge.
11. The appeals are, therefore, dismissed, but in the circumstances of these cases, there shall be no order as to costs.
1. These two appeals arise from the judgments of the customs excise & gold (control) appellate tribunal in order no. 304/91-C in E/Appeal No. 3841/90-C dated April 1, 1991 and in order no. 600/91-C in E/Appeal no. 2031/91-C dated July 19, 1991. The judgment in order no. 304/91-C in E/Appeal no. 3841/90-C dated April 1, 1991 is followed in order no. 600/91-C in E/Appeal no. 2031/91-C dated July 19, 1991.
2. The respondent, a manufacturer of sanitaryware, uses plaster of paris as inputs for the final product of sanitaryware. The process involves making of moulds from plaster of paris which are in turn used as inputs for manufacture of sanitaryware. The respondent claimed the benefit of exemption under notification no. 217/86 (as amended by notification no. 82/87-CE).
3. In these cases, though the excise authorities declined to grant the benefit of exemption, the customs excise & gold (control) appellate tribunal set aside their orders and held that the exemption would apply to the respondent.
4. Mr. R.P. Bhatt, learned senior counsel appearing for the revenue, contends that as the moulds of plaster of paris are goods classified under the Central Excise Tariff Act, 1985 they cannot be treated as inputs; they must be treated as the final product and as they are exempted, the respondent is not entitled to the benefit of exemption under notification no. 217/86.
5. We are afraid, we cannot accept the contention of the learned senior counsel.
6. The said notification reads as follows:
“SPECIFIED GOODS USED WITHIN THE FACTORY OF PRODUCTION IN THE MANUFACTURE OF FINISHED GOODS.
In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the central government hereby exempts goods specified in column (2) of the table hereto annexed (hereinafter referred to as ‘inputs’) manufactured in a factory and used within the factory of production, in or in relation to the manufacture of final products specified in column (3) of the said table, from the whole of the duty of excise leviable thereon, which is specified in the schedule to the Central Excise Tariff Act, 1985 (5) of 1986):
Provided that nothing contain in this notification shall apply to inputs used in or in relation to the manufacture of final products which are exempt from the whole of duty of excise leviable thereon or is chargeable to nil rate of duty.
Explanation : For the purposes of this notification, “inputs” does not include –
(i) to (iv) xxx xxx xxx
The table
S. Description of Description of
No. Inputs final products
1. Goods classifiable Goods classifiable
under any headings under any
of chapters 28, 29, 30, headings of
32, 33, 34, 35, 36, 37, chapter 28, 29, 30,
38, 39, 40, 48, 70, 72, 32, 33, 34, 35,
73, 74, 75, 76, 78, 79, 36, 37, 38, 39, 40,
80, 81, 82, 83, 84, 85, 70, 72, 73, 74, 75,
86, 87, 88, 89, 90, 91, 76, 78, 79, 80, 81,
92, 93, 94, 95 or 96 82, 83, 84, 85, 87,
88, 89, 90, 91, 92,
93, 94, 95 or 96
(other than those (other than those
falling under heading falling under
nos. 36.03 or 37.05) heading nos.
of the schedule to the 36.03 or 37.05) of
Central Excise Tariff the schedule to
Act, 1985 (5) of 1986) the Central
Excise Tariff Act,
1985 (5) of 1986)
The notification, extracted above, was amended by notification no. 82/87-CE which is as under:
“Exemption to captive consumption of MODVAT items – In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the central government hereby makes the following further amendment in the notification of the government of India in the ministry of finance (department of revenue) no. 217/86- central excise, dated the 2nd April, 1986, namely:
In the said notification for the table, the following table shall be substituted, namely:
The Table
S. Description of Description of
No. Inputs final products
1. 2 3.
1. Goods classifiable Goods classifiable
under any headings of under any
chapters .. 25 (other headings of
than those falling chapters .. 69 ..
under heading nos. (other than those
36.05 or 37.06) of the falling under
schedule to the Central heading nos.
Excise Tariff Act, 1985 36.05 or 37.06) of
(5) of 1986) the schedule to the
Central Excise Tariff
Act, 1985 (5) of
1986)
7. A perusal of the notification as amended by notification no. 82/87, extracted above, shows that the description of inputs given in column (2) under chapter 25, would be ‘plaster of paris’ and the final product given in column (3) under chapter 69 would be ‘ceramic goods’.
8. The proviso postulates a situation where the final product itself is exempted in which case alone the exemption of plaster of paris under notification no. 217/86 cannot be availed. It is nobody’s case that the sanitaryware falling under chapter 69 has been exempted by the central government. What is exempted is plastic moulds but they are only inputs and not final product in this case. This fact is further clarified by the central government in notification no. 221/86, as amended by notification no. 89/89. Item 6 thereof clearly mentions that plaster of paris moulds are input for ceramic products.
9. From the above discussion, it follows that plaster of paris which is used as inputs in relation to the manufacture of sanitaryware (final product), is exempt under notification no. 217/86 dated April 2, 1986, as amended.
10. In this view of the matter, we do not find any illegality in the orders under challenge.
11. The appeals are, therefore, dismissed, but in the circumstances of these cases, there shall be no order as to costs.
