Decided on September 23,1983



Suhas Chandra Sen, J. - (1.) The petitioners in this case have challenged the legality and validity of an order passed by the Assistant Collector, Central Excise, Calcutta. XIII Division. By the said order dated 25th June, 1981 the Assistant Collector, Central Excise, the Respondent No. 1 herein, directed the petitioner to maintain statutory Central Excise records and observe the formalities and clear all the excisable products "including Cycle Dynamo Lamp and Parts" falling under T.I. 68 on payment of appropriate Central Excise duty if the total value of such goods cleared during the preceding financial year exceeded Rs. 30,00,000. In that order it was clarified that Cycle Dynamo Lamp and Parts thereof were accessories and not parts of cycle and hence, were not eligible for exemption under Notification No. 55/75-C.E., dated 1st March, 1975.
(2.) The petitioners' case is that since its inception, it is engaged in the manufacture of, inter alia, Cycle Dynamo Lighting Sets which can only be used on bicycles. The petitioner has alleged that after kerosene-fed lamp, specially manufactured for lighting purposes for bicycles, became obsolete, lighting requirements by Dynamo in cycles became very common and was an essential component of a bicycle and was the most convenient accepted mode of lighting arrangement for using a cycle at night. The petitioner has further stated that the Cycle Dynamo Lighting Set is an essential part of a cycle. The current energising the bulb in the lamp is generated by a Dynamo which works by friction carried by the spindle set rubbing against the side of the cycle tyre. To facilitate the rotation of the Dynamo, the cycle tyre itself is given a special reinforcement as there is considerable amount of wearing out of the wall of the cycle tyre by the operation of the Dynamo. It has been stated that the Cycle Dynamo Lighting Sets manufactured by the company is specially designed for bicycles and cannot be used for any other purpose. The Dynamo Set cannot be used even in a Motor Cycle as the speed of the wheel and consequently the spindle of the rotor shaft will be too high for generating the current and energising the lamp. The case of the petitioner is that the Dynamo Lighting Sets that are manufactured by the petitioner are parts of a cycle and as such, are eligible for exemption under the Notification No. 86/79 dated 1st March, 1979.
(3.) On behalf of the Respondents it has been contended that the petitioner company started manufacturing Bicycle Dynamo Lighting Set and Bicycle Horns sometime in the year 1975. The petitioner made an application to the Central Excise Authorities for granting of a licence for manufacturing Bicycle Dynamo Lighting Set and Bicycle Horns under Tariff Item No. 68 and the licence was granted accordingly. Tariff Item No. 68 is the residuary clause and will have to be contrasted with Tariff Item No. 35 as it stood before it was deleted by the Finance Act, 1979. Tariff Item 35. PARTS OF CYCLES OTHER THAN MOTOR CYCLES NAMELY :- (i) Free wheels, (ii) Rims. Tariff Item 68. ALL OTHER GOODS, NOT ELSEWHERE SPECIFIED MANUFACTURED IN A FACTORY BUT EXCLUDING :-- (a) alcohol, all sorts, including alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics; and (c) dutiable goods as defined in Section 2(c) of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. Explanation.--In this Item, the expression "factory" has the meaning assigned to it in Section 2 (m) of the Factories Act, 1948.;

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