COLLECTOR OF CENTRAL EXCISE NEW DELHI Vs. HINDUSTAN SANITARYWARE AND INDUSTRIES
SUPREME COURT OF INDIA
COLLECTOR OF CENTRAL EXCISE,NEW DELHI
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(1.)THESE two appeals arise from the judgments of the Customs, Excise and Gold (Control) Appellate Tribunal in Order No. 304/91-C in E/Appeal No. 3841/90-C dated 1/04/1991 and in Order No. 600/90-C in E/Appeal No. 2031/91-C dated 19/07/1991. The judgment in Order No. 304/91-C in E/Appeal No. 3841/90-C dated 1/04/1991 is followed in Order No. 600/91-C in E/Appeal No. 2031/91-C dated 19/07/1991.
(2.)THE respondent, a manufacturer of sanitaryaware, uses plaster of paris as imputs 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.)
In these cases, though the Excise authorities declined to grant the benefit of exemption, the Customs, Excise and Gold (Control) Appellate Tribunal set aside their orders and held that the exemption would apply to the respondent.
Mr. R. P. Bhatt, learned senior counsel appearing for the Revenue, contends that as the moulds of plster 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.
(3.)WE are afraid, we cannot accept the contention of the learned senior counsel.
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 Excises 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-
(other than those falling under Heading under Heading Nos. 36.03 or 37.05) of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986)(other than those falling under Heading under Heading Nos. 36.03 or 37.05) of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986)"
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