ORDER
P.G. Chacko, Member (J)
1. The respondents are manufacturers of machineries falling under Chapter 84 of the CETA Schedule. They removed certain spare parts of concrete pump (on payment of duty) to a customer, but the latter returned the goods for want of demand in market. Upon receipt of the returned goods, the respondents manufactured concrete pumps out of the spare parts and cleared the same (on payment of duty) to another customer. The return of these spare parts was in terms of Rule 173L of the Central Excise Rules, 1944. Having removed the concrete pump on payment of duty, the party filed a claim under Rule 173L for refund of the duty paid initially on the spare parts. This claim was rejected by the original authority on the ground that the returned spare parts had not been subjected to any of the processes specified under Rule 173L(1) viz. remarking, refining, reconditioning or other similar processes. This decision of the adjudicating authority was set aside by the first appellate authority relying on the Tribunal’s decision in the cases of Asea Brown Boveri Ltd. v. Commissioner of Central Excise, Bangalore and Taylor Instrument Co. (I) Ltd. v. Collector of Central Excise, New Delhi . Hence the present appeal of the Revenue, wherein it is claimed that the facts of the cases of Asea Brown Boveries Ltd. and Taylor Instrument Co. (I) Ltd. are distinguishable from those of the instant case. Ld. DR has reiterated this ground. It has been pointed out that, in the present case, the product cleared subsequently by the respondents was different from the goods cleared earlier from their factory.
2. Ld. Counsel for the respondents submits that the returned spare parts and the pump made out of them are to be treated as goods of the same class inasmuch as both are falling under the same Heading 84.13 of the CETA Schedule and, therefore, it cannot be said that a product different from the returned goods was removed by the respondents. Therefore, according to ld. Counsel, the goods is covered by Rule 173L. In this connection, reliance is placed on the Tribunal’s decision in Commissioner of Central Excise v. Orissa Cement Ltd. , wherein defective firebricks were considered to be of the same class as that of mortar obtained by grinding of the bricks, having regard to the fact that both the items were covered by the same Tariff Item (No. 68) of the old Central Excise Tariff.
3. After carefully considering the submissions, I find that there is no dispute of the fact that the returned spare parts were not subsequently removed as spare parts. A concrete pump was manufactured out of those spare parts and the same was removed on payment of duty. By no stretch of imagination can the pump be considered to be the same as its spare parts. These are two different goods falling under two different sub-heading in the Tariff (8413.99 and 8413.80). The spare parts were totally valued at a little over Rs. 2.5 lakhs whereas the pump was valued at Rs. 23 lakhs. Admittedly, the pump was manufactured out of the spare parts. Such process of manufacture yielding an entirely different commodity which is many times costlier than the inputs cannot belong to the realm of remaking, refining, reconditioning or “other similar processes”. It has to be borne in mind that the expression “other similar processes” should be read ejusdem generis with the expressions earlier occurring (remaking, refining etc.). The process of conversion of spare parts into a concrete pump is not akin to the processes specified under Rule 173L. The original authority was right in holding that Rule 173L was not applicable to the goods.
4. Ld. Commissioner (Appeals) has relied on two decision of this Tribunal for the purpose of setting aside the original authority’s order. The appellant has correctly distinguished those cases from the case on hand vide paragraphs 5 and 6 of the grounds of appeal, which are reproduced below:
5. The Commissioner (Appeals) has erred in placing reliance on the case of Asea Brown Boveri . In the said case M/s. Asea Brown Boveri has dispatched ‘computer system’ to their customer M/s. Gold Star Cements. Since the customer was not in a position to take delivery of the goods the same were returned to M/s. Asea Brown Boveri. Subsequently, the ‘computer system’ was dismantled and remade into another ‘computer system’ to suit the requirements of another customer M/s. Rewa Cements Ltd. In this case the goods, namely computer system, returned to the factory were used in the production of computer system of different configuration. Hence the goods returned to the factory and the goods produced out of them are of the same class. The facts are different in the case in hand. Here the spare parts that were returned to the factory have been used in the manufacture of machinery, which is of a different class. Hence, the Commissioner (Appeals) has erred in placing reliance in the said case law.
6. The Commissioner (Appeals) has erred in placing reliance in the case of Taylor Instrument Co. (I) Ltd. manufactured ‘Electronic Industrial Process Control Instruments”. As the goods were highly sophisticated and sensitive, the goods once returned to the factory had to be re-tested, re-checked and recalibrated before they were to be sold again. However, even after such re-testing, re-checking and recalibration, the goods remained the same and were of the same class. Whereas in the instant case the goods brought into the factory and the goods produced out of them are not of the same class. Hence the Commissioner (Appeals) has erred in placing reliance of the said case law.
The decision in Orissa Cement (supra) holding different goods falling under T.I. No. 68 of the old Tariff as goods of the same class cannot be strictly applied to the new Tariff period. Moreover, that decision did not take into account the question whether grinding of bricks into mortar amounted to any of the processes specified under Rule 173L(1).
5. In the result, it is held that Rule 173L is not applicable to the refund claim in question and hence the respondents are not entitled to claim refund of the duty, which they originally paid on the spare parts. It was open to them to take Modvat credit of that duty and utilise the same for payment of duty on the pump. On the facts of the case, no alternative remedy was available to them under Rule 173L. The impugned order is set aside and this appeal is allowed.
(Dictated and pronounced in open Court).