BAJAJ AUTO LTD. Vs. COMMISSIONER OF CENTRAL EXCISE,

JUDGEMENT

(1.) THE brief facts of the case are that the appellants herein are engaged in the manufacture of motor vehicles, motor vehicle parts and special purpose machines falling under Chapters 84 and 87 as well as tools/dies and gauges falling under Chapter Heading 82.02 and 90.31. They claimed the benefit of Notification 217/86 dated 2.4.86 for tools, dies and gauges manufactured and cleared for captive consumption during the period 1.8.86 to 27.10.88. A show cause notice proposing denial of the benefit on tools, dies and gauges and proposing recovery of duty and proposing imposition of penalty was issued in July 1991. The Collector of Central Excise dropped the demand raised on tools and dies by extending the benefit under Exemption 58/86 dated 10.2.86; however, he disallowed the benefit of Notification 217/86 to gauges, holding that they are measuring and checking instruments in the nature of machines, equipment, appliances, tools or apparatus used in processing or producing excisable goods and hence excluded from the coverage of the Notification. Accordingly he confirmed a duty demand of Rs.8013/ - on gauges cleared between April 1987 to October 1987. Hence this appeal.

(2.) WE have heard both sides and carefully perused the recent decision of the Larger Bench in the case of Commissioner of Central Excise, Indore vs. M/s.Surya Roshni Ltd. reported in 2001 (42) RLT 817 which has confirmed the earlier Larger Bench decision in the case of M/s.Jawahar Mills Ltd. and Others vs. Commissioner of Central Excise reported in 1999 (32) RLT 379 in the context of Rule 57Q of the Central Excise Rules wherein it has been held that the expression "used for producing or processing of any goods for the manufacture of the final products" occurring in the first leg of clause 1(a) of the Explanation to Rule 57Q is not synonymous with the expression "used for bringing about any change in any substance for the manufacture of the final products" occurring in the second leg of the clause, and that the expression "used for producing or processing" is not limited to the ingredients or commodities used in the process or those directly and actually needed for turning out, or creation of goods. In view of the fact that measuring instruments have been held in earlier decisions of the Tribunal to be used for producing or processing of goods and hence eligible to capital goods credit, they cannot be considered to be inputs for the purpose of Notification 217/86. We uphold the impugned order and dismiss the appeal.