- (1.) THE issue involved in both the petitions are common and are being decided together. For facility, the facts in Writ Petition No.868 of 2005 are being taken into consideration.
(2.) THE petitioner is a manufacturer of Power Driven Pumps (hereinafter referred to as the "PD Pumps") falling under Chapter heading 84.13, i.e., Vertical Turbine Pump. The petitioner also manufactures parts and components for captive use in the manufacture of PD Pumps. By notification No.155/86, dated 1.3.1986 as amended by notification Nos.277/86 dated 24.4.1986 and 365/86 dated 29.7.1986 exemption was granted under Rule 8(i) of the Central Excise Tariff Rules from payment of Central Excise Duty on deep tube well turbine pumps. During the period 1.3.1986 to 24.4.1986 it is alleged that the petitioner contravened the provisions of Rule 173 -C and 173 -F of the erstwhile Central Excise Rules 1944 and, accordingly, a show cause notice dated 24.9.1987 was issued to show cause as to why central excise duty amounting to Rs.61,710/ - for the period 1.3.1986 to 2.4.1986 should not be demanded and recovered from them on clearance of column and shaft assembly and discharge head assembly.
(3.) ANOTHER show cause notice dated 11/12.1.1989 was issued to the petitioner to show cause why duty at appropriate rate on column and shaft assembly and discharge head assembly should not be made upon the petitioner. The petitioner, being aggrieved by the issuance of the show cause notice, filed Writ Petition No.492 of 1989, which was eventually dismissed by an order dated 16.8.2000, on the ground of alternative remedy. During the pendency of the writ proceedings several show cause notices were issued to the petitioner for various periods ranging from 1.3.1986 to December, 2000. After the dismissal of the writ petition, the petitioner filed a reply to the show cause notices contending that the vertical turbine pump, which is being manufactured by them consist of - (1)bowl assembly (2)column and shaft assembly, and (3)discharge head assembly. The petitioner contended that these assemblies when fitted together performs the function of a pump by which water is lifted from one point to another point by a rotating action of the shaft and the impeller. The contention of the petitioner is, that the bowl assembly alone could not perform the principal function of a pump, which is to lift the water from a deep tube well in the absence of a column and shaft assembly as well as discharge head assembly. It was contended that in the absence of these two assemblies the bowl assembly could not rotate or convert the mechanical energy into kinetic energy and that the bowl assembly could only perform the function of a pump only with the help of column and shaft assembly as well as discharge head assembly when water is lifted from the deep tube well to the ground level. The contention of the petitioner was that the bowl assembly cannot perform the principal function, namely, lifting of the water without the help of the column and shaft assembly and discharge head assembly.;