SUBROS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) In these two appeals filed by M/s. Subros Limited, arising out of a common Order -in -Original No. 9/2002 dated 28 -6 -2002 passed by the Commissioner, Central Excise, the issue involved is whether the different goods cleared from one or both the Plants of the Appellants constitute car air -conditioner kit not eligible for exemption from payment of Special Excise Duty under Notification No. 22/2000 -C.E., dated 6 -3 -2000 or parts of car air -conditioner eligible to the exemption.

(2.) 1 Shri V. Lakshmikumaran, learned Advocate, submitted that the Appellants have two Plants, viz., Plant I and Plant II in which they manufacture various parts and accessories of car air -conditioning system for supplies to various manufacturers of Motor Vehicles; that in Plant I, they manufacture cooling unit assembly and condensing unit assembly; that in Plant II they manufacture the gas compressor, parts of gas compressor and other fitting parts like valves, pipes, tubes, etc., necessary for the fitment of the car air -conditioner; that separate purchase orders are placed by the Motor car manufacturers on Plant I and Plant II depending upon their requirements; that based on these orders, supply of the various parts is made separately under separate invoices at various points of time; that at no point of time, the complete car air -conditioner emerges at the hands of Plant I or Plant II; that the customers procure other parts required for assembly of the car airconditioner from various other manufacturers; that the complete airconditioner comes into existence during the course of manufacture of the car.

(3.) 1 The learned Counsel submitted that the Commissioner has confirmed the demand of duty holding that the clearance of parts made from both the plants are to be clubbed for the purpose of determining the benefit of exemption from payment of Special Excise Duty (SED); that the clubbing of the clearances made by the two independently Central Excise registered units of the same manufacturers under the jurisdiction of different offices, to determine the eligibility of the exemption is ex -facie erroneous and contrary to well settled legal position; that it is settled law that the goods manufactured in a factory and cleared therefrom have to be assessed to duty in the condition in which they leave the factory; that any further operation or process done on the goods is totally irrelevant and extraneous for the purpose of classification; that it is also settled legal position that goods manufactured and cleared from each unit, may be of the same entity, are to be assessed to duty separately and not by clubbing the clearances of all the units; that the Central Excise law does not permit the assessment of the goods to duty based on such clubbing of clearances of various units located in different places and effected at different points of time. He relied upon the decision in the case of A.P. Heavy Machinery and Engg. Ltd. v. CCE, Hyderabad - 2001 (128) E.L.T. 155 (T) wherein it has been held that ''these units of the same corporate entity situated in three different municipal limits cannot be considered as the same manufacturer..... The goods are to be assessed in the condition in which they are presented for the purpose of assessment, the duty is to be assessed when the goods are being removed from the place of removal i.e. factory gate." Reliance has also been placed on the decision of the Larger Bench of the Tribunal in Sony India v. Commissioner of Customs - 2002 (143) E.L.T. 411 (T -LB). He, further, submitted that the findings of the Commissioner that they had floated the second unit only to smoother the operations and claiming exemption is ex -facie erroneous and incorrect; that if this finding is taken to be correct, the clearances of all manufacturers from one or more factories have to be clubbed in order to determine the eligibility of any exemption as in the case of small -scale exemption notification; that there is no condition in the Notification that the clearances of two or more units of the same manufacturer are to be clubbed to determine whether they are entitled for the exemption.