Kapadia, J. - (1.) The short question which arises for determination in these civil appeals filed by the assessee under section 35-L(b) of the Central Excise Act, 1944 (hereinafter referred to as "the Act") is - whether assembly of nozzles and nozzle holders (intermediate products) brings into existence a new product called an "injector" and if so, whether the department was right in classifying the said injector under sub-heading 8409.00.
(2.) Appellant is engaged in the manufacture of nozzles, nozzlers holders and injectors. Vide show- cause notice dated 3.9.1986, the department called upon the appellant to show cause as to why duty @ 20% ad valorem on the value of nozzles and nozzle holders should not be recovered in respect of injectors on the ground that the appellant had produced nozzles and nozzle holders falling under tariff item 8409.00 which were captively consumed for the manufacture of injectors falling under 8409.00 for which no declaration was made by the appellant in their classification list. At this stage, we may point out that the matter has a chequered history, it has been remanded several times and for the reasons mentioned hereinafter, it is not necessary to set out the entire history of the prior litigation. Suffice it to state that in reply to the show-cause notices, the appellant submitted that fitting of nozzles into nozzle holders did not amount to manufacture; that, even after such fitment, the end-result remained "nozzles and nozzle holders"; that, this entire controversy stood settled by the earlier judgment of Customs, Excise and Gold (Control) Appellate Tribunal (for short "the tribunal") in the case between the same parties, namely, Collector of Central Excise vs. Motor Industries Co. Limited, reported in 1989 (43) ELT 290; that, nozzle and nozzle holder had no independent application as such; that, they have to be used in the IC engine in an assembled state to create combustion in the combustion chamber of IC engines. According to the appellant, an injector was a fitment of nozzles into nozzle holders and that on coupling, no new product came into existence. In reply, the appellant further stated that non-vehicular injectors were exempted from payment of duty. In this connection, it was submitted that non-vehicular injectors constituted parts of diesel engine used by agriculturists and farmers and, therefore, the Government decided to grant exemption to such non-vehicular injectors. At this stage, it may be noted that nozzles and nozzle holders stood excluded from exemption notification No.217/85 dated 8-10-1985. However, according to the appellant, by Amendment Notification No.79/86 dated 10-2-1986, non-vehicular injectors were also given the benefit of exemption, which has not been appreciated by the department (See Written Submissions filed by the assessee before the A.C., on running page No.145 of the paperbook of original record). Similarly, according to the appellant, exemption was also given by the Government to vehicular nozzles and nozzle holders used in a factory of production vide notification No.75/86 dated 10-8-1986 (See Written Submissions filed by the assessee before the A.C., on running page No.142 of the paperbook of original record).
(3.) By the impugned judgment, the tribunal held that the assessee was not entitled to exemption under the above notification No.217/85 as "nozzles and nozzle holders" were specifically excluded from the purview of the said notification; that, the issue in the case of Motor Industries Co. Limited (supra) was only whether nozzles fitted with the nozzle holders (injectors) were assessable under item 68 of the old Tariff though nozzles and nozzle holders were duty paid under item 34A, hence that judgment had no application to the controversy in hand.;