Back
SUPREME COURT OF INDIA
S.P. BHARUCHA AND A.P. MISRA, JJ.
Hindustan Sanitaryware and Industries Ltd. and Lakshmi Cement, Appellants
VERSUS
Collector of Customs, Calcutta, Respondent.
Civil Appeal Nos. 10744-10745 of 1995, D/- 2-11-1999.
component parts - excise duty refund - The court discussed the meaning of the phrase 'component parts' in the context of claims for refund of excise duty. It held that a spare part, when fitted into a machine to replace a defective or worn out part, becomes a component of the machine and is considered a component part.
Fact of the Case:
The appeals arose in the context of claims for refund of excise duty, specifically pertaining to the meaning of the phrase 'component parts.' The Tribunal drew a distinction between component parts and spare parts, but a larger Bench of the Tribunal considered spare parts as a species of component parts.
Finding of the Court:
The court found that a spare part, when fitted into a machine to replace a defective or worn out part, becomes a component of the machine and is considered a component part. The appeals were allowed, and the order under appeal was set aside, with the appellants entitled to refunds only if permissible under the law.
Issues: The main issue was the interpretation of the phrase 'component parts' in the context of claims for refund of excise duty.
Ratio Decidendi: The court held that a spare part, when fitted into a machine to replace a defective or worn out part, becomes a component of the machine and is considered a component part. It relied on the larger Bench decision and found the distinction drawn between component parts and spare parts to be without a difference.
Final Decision: The appeals were allowed, the order under appeal was set aside, and the appellants were entitled to refunds only if permissible under the law. No order as to costs was made.
Judgement
JUDGMENT :- The issue that we are concerned with in these appeals arises in the context of claims for refund of excise duty. It pertains to the meaning of the phrase component parts. The Tribunal, in the impugned order, drew a distinction between component parts and spare parts, following its earlier decision in the case of Vaz Forwarding Pvt. Ltd. v. Collector of Customs. Component parts, according to it, were those which were initially used in the assembly or manufacture of a machine and spare parts were those parts which were used for the subsequent replacement therein of worn out parts. The decision in Vaz Forwarding Pvt. Ltd. and other decisions of the Tribunal were considered by a larger Bench of the Tribunal in Jindal Strips Ltd. v. Collector of Customs, Bombay, (1997) 94 ELT 234. The larger bench took the view that a spare part was a replacement part to replace a damaged or worn out component but it was, nevertheless, a component part. Component was the genus and spare was a species thereof; it was a component which was used for replacement. The larger Bench judgment found that the distinction drawn in Vaz Forwarding Pvt. Ltd. was a distinction without a difference.
2. The larger Bench decision followed decisions of this Court, and we are of the view that its view is correct. A spare part, though fitted into a machine subsequent to its manufacture, to replace a defective or worn out part becomes a component of the machine. It is a component part.
3. The appeals succeed and are allowed. The order under appeal is set aside, but the appellants shall be entitled to refunds only if permissible under the law.
4. No order as to costs.
Appeals allowed.
FOR CITATION AIR 2000 SC 3506
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
