ORDER
P.K. Kapoor, Member (T)
1. Since the issue involved in these appeals is the same, they are being disposed of by this common order. In all these cases the appellants are engaged in the manufacture of M.S. Structurals and other rolled products namely, angles, bars, rods and other rolled products in their Rolling plants. They also purchase rough unmachined rolls from the market which are machined and grooved in their factories for being captively used as replacements of worn-out rolls in Rolling Mill. After the visit of Central Excise Officers to their factory the appellants were served with show cause notices alleging that they had manufactured M.S. rolls falling under sub-heading 8455.00 by undertaking the process of grooving, surface finishing and machining of plain/casted/forged rolls falling under Chapter 73. The show cause notices also alleged that the appellants had captively consumed the said M.S. Rolls without maintaining any records or filing classification lists and price lists and without discharging duty liability in respect thereof. Apart from demanding duty on M.S. rolls manufactured by the appellants the show cause notices also proposed the levy of penalty on the appellants. In their replies to the show cause notices each of the appellants contended that the process of grooving and machining of roughly shaped rolls does not amount to manufacture. They submitted that even if it was assumed that the process carried out by them was held as amounting to manufacture, M.S. rolls being essential parts of Rolling Mill, they would be eligible for exemption in terms of Notification No. 281/86. The Collector, however, rejected the appellants’ contentions and passed the impugned orders confirming the demands and imposing penalties on the appellants.
2. On behalf of the appellants at Sl. No. 1 Shri R. Nambirajan, learned advocate appeared before us. He submitted that in the order No. E/301/93-B1 dated 14-10-1993 in the case of M/s. Partap Steel Rolling Mills (1935) Ltd. v. Collector of Central Excise, Indore the Tribunal has held that Rolling Mill rolls manufactured by the assessee out of unmachined ungrooved rolls in their own workshop for being used in the same factory for repair and/or maintenance of machinery installed therein would be eligible for exemption under Notification No. 218/86. He contended that the grooved M.S. Rolls produced by the appellants out of rough unmachined rolls purchased from the market would be exempt from duty in terms of Notification No. 281/86 since the finished M.S. rolls were being used only for captive consumption within the appellant’s factory for the repair or maintenance of Rolling Mill. He pleaded that the appeal may be allowed since the matter was covered in favour of the appellants by the Tribunal’s Order No. E/301/93-B1, dated 14-10-1993. On behalf of the appellants at Sr. Nos. 2 to 5 Shri Y.N. Chopra, learned Consultant appeared before us. He reiterated the submissions made by Shri Nambirajan. Shri K.R. Chopra, learned Consultant who appeared on behalf of the appellants at Sr. No. 6 stated that he was adopting the submissions made by Shri Nambirajan.
3. On behalf of the respondent Shri B.K. Singh, the learned SDR submitted that in arriving at its finding in the Tribunal’s Order No. 301 /93-B1, dated 14-10-1993 the Tribunal was mainly influenced by the consideration that an M.S. Roll could not be equated with a Rolling Mill. He stated that the Tribunal having failed to perceive or take into account the fact that in terms of Note V to Chapter XVI of the Central Excise Tariff Roll for Rolling Mill falling under Sub-heading 84.55 has to be deemed as a machine or appliance which cannot be used for repair or maintenance of Rolling Mill. He contended that under these circumstances the Tribunal’s decision cited by the appellants has to be deemed as having been passed ‘Sub silentio’ and would not constitute a precedent. In support of his contention he placed reliance on the Tribunal’s decision in the case of Collector of Central Excise v. Surgichem reported in 1987 (27) E.L.T. 548. He cited the Tribunal’s decision in the case of Thio Pharma v. Collector of Central Excise, reported in 1992 (60) E.L.T. 395 and stated that the definition of the word “appliance” not being available in the relevant notification resort to dictionary or any other meaning would be permissible. He added that M.S. Roll which is capable of imparting different shapes to metals has to be treated an appliance and not a part of Rolling Mill. He stated that according to K.T. Aiyar’s Judicial Dictionary, Ninth Edition, “In order to brand particular article to be appliance two aspects have to be borne in mind, firstly that an appliance is quite distinct from materials from which it is made, and secondly, that an appliance as an apparatus, device or instrument is a means to an end”. He reiterated his stand that ‘M.S. Rolls’ being in the nature of appliances or machines they could not be deemed as eligible for exemption under Notification No. 281/86. He stated that in support of his finding that the extended period was invokable for confirmation of the demand the Collector had observed that the appellants had evaded duty by suppression of facts. On these grounds he pleaded for the rejection of the appeal.
4. It is seen that the main point raised on behalf of the Respondent is that the Tribunal’s decision in order No. E/301/93-B1, dated 24-10-1993 in the case of M/s. Pratap Steel Rolling Mills (1935) Ltd. v. Collector of Central Excise, Indore has to be deemed as ‘Sub silentio’ and would not constitute a precedent. In this regard it has been contended that in arriving at the finding that M.S. Rolls manufactured by the assessee out of unmachined ungrooved rolls in his own workshop for being used in the same factory for repair and/or maintenance of machinery installed therein would be eligible for exemption under Notification No. 281/86, the Tribunal had failed to perceive or take into account the fact that Roll for Rolling Mills falling under sub-heading 84.55 of the Tariff cannot be used for the repair or maintenance of Rolling Mill since in terms of Note V to Chapter XVI of the Tariff, Roll for Rolling Mill falling under sub-heading 84.55 has to be deemed as a machine or appliance.
5. It is seen that in the case of Collector of Customs v. O.E.N. India Ltd., reported in 1989 (42) E.L.T. 235 the Tribunal has held that Interpretative Rules, Section Notes etc. governing the classification under Tariff are not relevant for the purpose of interpretation of exemption notifications. For this reason we do not find any force at all in the respondent’s contention that the Tribunal’s Order No. E/301/93-B1, dated 14-10-1993 in the case of M/s. Partap Steel Rolling Mills (1935) Ltd. v. Collector of Central Excise, Indore, has to be deemed as having been passed ‘Sub silentio’ since in the interpretation of Notification No. 281/86 the Tribunal had failed to take into account the provisions of Note V to Chapter XVI and wordings of sub-heading 84.55 of the Central Excise Tariff.
6. The respondents have also contended that even otherwise M.S. Rolls manufactured by machining roughly cast rolls in a workshop for use in the same factory would not be eligible for the benefit of the Notification No. 281/86 since even according to the dictionary meaning of the term ‘appliance’ M.S. Roll has to be deemed as a product in the nature of an appliance or machinery which is not usable for repair or maintenance of Rolling Mill. In this regard reference has been made to the Judicial Dictionary by K.T. Aiyer, Ninth Edition according to which an ‘appliance’ is quite distinct from materials from which it is made and secondly appliance as an apparatus, device or instrument is a means to and end. In this connection it has also been contended that the term ‘Rolling Mill’ stands for a manufacturing plant and not a single machine.
7. Even though the Harmonised System (HSN) is not relevant for the purpose of interpretation of an exemption notification we consider it desirable to refer the following extracts from the notes to sub-heading 84.55 of the HSN in order to determine whether a ‘Rolling Mill’ is a single machine and ‘rolls’ can be parts of ‘Rolling Mills’:-
(I) ROLLING MILLS
“Rolling mills are metal working machines consisting essentially of a system of rollers between which metal is passed, the metal is rolled out or shaped or by pressure exerted by the rollers, and at the same time the rolling modifies the structure of the metal and improves the quality. In some cases in addition to their normal functions, rolling mills may be used to provide a pattern or metal surface or to roll together two or more sheets of different metals to produce laminated product… .”
(II) ROLLS AND OTHER PARTS
“Subject to the general provisions regarding the classification of parts (See the General Explanatory Note to Section XVI), the heading covers parts of rolling mills. Among the parts covered by this heading are rolls of rolling mills. These vary considerably in length and diameter, those for steel, ranging approximately from 30 to 520 cm in length and from 18 to 137 cm in diameter. They are made of cast iron, or of cast or forged steel, usually specially hardened on the surface and carefully machined to exact dimensions; they may be plain, or with grooves of various shapes to form the necessary passes. Each roll ends in necks, often specially shaped for mounting in the housing of the rolling mill. Outside the roll necks, wobbler ends are cut to which the driving force is applied.”
8. From the above discussion it follows that “Rolling mill” is a metal working machine in which the primary parts are a system of rollers for rolling and shaping of metal and such rollers can be plain or grooved. It cannot be denied that due to use over a certain period on account of wear and tear the rollers in any “Rolling Mill” would require re-grooving or reconditioning for ensuring that the quality of the rolled product does not suffer. According to the Chamber’s Twentieth Century Dictionary the word ‘maintenance’ implies “to keep in working order”. We are, therefore, inclined to agree with the appellants’ that M.S. Rolls manufactured by machining in the workshop in their factory out of unmachined rolls received from other parties, for being used in the same factory, have to be deemed as having been used for repair and maintenance of the machinery namely, Rolling Mills installed in the factory.
9. In view of the above discussion we follow the Tribunal’s Order No. E/301/93-B1, dated 14-10-1993 in the case of Partap Steel Rolling Mills (1935) Ltd. and hold that M.S. Rolls manufactured by the appellants’ out of rough or unmachined rolls for maintenance and repair of ‘Rolling Mills’ would be eligible for the benefit of Notification No. 281/86.
10. In view of the foregoing, we allow the appeals with consequential relief to the appellants.