ORDER
R. Jayaraman, Member (T)
1. Though, this day, only stay application was listed for hearing, Shri Parakh pleads that since this is a short issue, he would like to plead the entire appeal, which can be disposed of.
2. After hearing both sides and with their consent, we have taken up the appeal itself for disposal, granting waiver of pre-deposit.
3. The appeal is against the Order-in-Appeal No. PKS-289/BII/85, dated 4-12-1995 rejecting the appellant’s appeal. The appellants are engaged in the manufacture of machines for electroplating, classifiable under Chapter Heading 85.43. They claimed the benefit of exemption under Notification No. 51 /93-C.E. against Serial No. 20 of the table annexed to the Notification. Under Serial No. 20 of the table annexed to the Notification, machinery used for the production of a commodity classifiable under 85.43 is eligible for the concessional rate. There is no dispute that the machine is an electroplating machine classifiable under 85.43. However, the lower authorities have held that electroplating machine is not used for the production of a commodity. It is used to electroplating purposes and applying the ratio of the decision of the various judicial pronouncements, wherein it has been held that electroplating cannot be construed to be manufacture and it cannot be said to bring into existence a new commodity attracting further levy, the lower authorities have held that the machine is not eligible for the concessional rate. Hence the present appeal before the Tribunal.
4. Shri R.J. Parakh the ld. Advocate pleads as below : 85.43 seeks to cover various types of machines, some of which are for service industry and some of them are production machines. Items, like signal generators, particle accelerators could be construed to be items used in the service industries, for which the exemption is not available. However, in the case of electroplating machines, it can be used in the production line for the manufacture of goods and hence it would be construed to be a machinery used in the production of a commodity. He also pleads that the decisions relied upon by the lower authorities relate to the question whether electroplating done on a commodity would attract further levy. In that case, those observations have been made and cannot he applied for considering whether a machine used for production of a commodity would not include electroplating machine. He also seeks to rely on the judgment of Bajaj Auto Ltd. reported in 1995 (80) E.L.T. 644.
5. After hearing both sides, we find that electroplating activity can be done in independent units. It can provide the service of electroplating not only with respect to new items but also in case of old and rusted item. Hence we are unable to appreciate that electroplating activity can only be used in conjunction with the manufacturing activity and not with the servicing activity. Hence the arguments advanced by the ld. Advocate on the ground that 85.43 covers items of machinery in the service sector and the specification made in the Notification is as to identity machinery used in production does not carry conviction. The point to be considered is whether the machine per se is capable of producing of a commodity. The Notification confers benefit only in respect of machines used for the production of commodity. Hence, on a perusal of the relevant Tariff item, it covers electrical machines having individual functions not elsewhere prescribed in the Chapter. From this heading the Notification seeks to confer the concessionl rate only in respect of machines used for production of a commodity, and not in respect to all the machines listed therein. Hence the question for consideration is whether it is all machine capable of producing a commodity. The answer to this question cannot be given in favour of the appellant. The decision relied upon by the lower authorities, though are in the context of levy of duty on an item subjected to electroplating, the ruling given by the Court is that mere electroplating does not amount to manufacture and cannot be said to bring into existence a new commodity. Hence a machine exclusively for electroplating cannot be said to bring into existence a commodity. The decision of the Tribunal relied upon by the ld. Advocate also does not seem to come to their rescue. Electroplating may be incidental for the manufacture of a product, but here the exemption is in respect of a machine for production of a commodity and not in respect of a machine, used in or in relation to the production of a commodity.
6. We are also to take note of the Supreme Court’s decision that the wording in the Notification has to be construed strictly, especially at the entry stage of considering eligibility of the goods to exemption. The wording in the notification is machinery for producing a commodity. Electroplating machine per se cannot produce a commodity. We therefore find no reason to disagree with the findings of the lower authorities. The appeal is therefore rejected.