TATA IRON AND STEEL CO. LTD. Vs. CCE

JUDGEMENT

(1.) IN all these three appeals the orders earlier made by the Tribunal were set aside by Hon'ble the Supreme Court and the matters were remanded for a fresh adjudication keeping in view the legal position indicated in the judgement and order rendered by the Hon'ble the Supreme Court in Civil Appeal No. 5412/99 (with Civil Appeal Nos. 5836/99 and 5209/01).

(2.) THE controversy centers around the dispute whether benefit of the notification No. 281/86 dated 24.04.86 was available to the parts of locomotive and rolling stock, which were manufactured by the appellant in its growth shop unit (Appeal No. E/3802/90). There is no dispute over the fact that even this growth shop unit is owned by the appellant in the two other appeals.

(3.) THE show cause notices in all these cases were issued mainly on the footing that locomotive/rolling stock by the nature of their installation on rails cannot be described machinery installed within the meaning of the said notification. On this reasoning, it was held that the spare parts which were manufactured by the appellant's growth shop, cannot be intended for use of any "machinery installed" within the meaning of the said notification exempting excisable goods manufactured in a workshop within the factory and intended for use in the said factory or in any other factory of the same manufacturer for repairs or maintenance of machinery installed therein, from the whole of the duty of excise leviable thereon, with a proviso to the effect where such use is in a different factory of the manufacturer, the exemption contained in that notification was allowable subject to the observance of the procedure set out in chapter X of the Central Excise Rules, 1944. Appeal No. E/3745/89 -Ex which has been filed against the order holding that the appellant was not entitled to the benefit of the notification No. 281/86 -CE dated 24.04.1986 and approving the classification list with that modification, challenges the finding that the railway locomotive and rolling stock were not machinery and were not capable of being installed anywhere. The Assistant Commissioner in the order -in -original considering the meaning of the word "machinery" held that the goods at serial No. 1(iv) of item No. 6 of the classification list, namely, parts of loco, wagon and rolling stock, viz. axles, wheels, wheel sets, etc., falling under chapter 86 of the Tariff Act were used for repair and maintenance of railway and tramway, locomotive and rolling stock only and therefore, exemption under the notification was not admissible, since railway tramway locomotive, rolling stock were not considered to be in the class of machinery because they fell under Section XXVII of the Tariff Act, provided for "vehicles, aircraft, vessels and associated transport equipments," which included "railway and tramway locomotive and rolling stock" and not under Chapter 86 of the Tariff Act and were not considered to be of the class of machinery. It was held that legislature's intention in respect of notification No. 281/86 -CE dated 24.4.86 should be viewed in the light of its intention of not including "railway and tramway locomotive and rolling stocks" under chapter 86 of Section XVII, which has been specifically provided in the Tariff Act for "machinery and mechanical appliances and parts thereof". Therefore, the claim in the classification list seeking benefit of the said notification was rejected and the classification list, as so modified was approved. The appellate Commissioner upheld that order by holding that the appellant was manufacturing the parts of loco wagons such as, axles, wheels, hoop, hubs, axles boxes, brake gears etc. which cannot be regarded for maintenance of plant and machinery which are generally fixed to the earth. It was held that the wordings in notification are quite clear on the subject.