Per Shri V.P. Gulati :

The prayer in the application is for dispensation of the pre-deposit of duty of Rs. 9,09,917/- and penalty of Rs.90,000/-. The appellants have been held to have manufactured cone winding machines.

2. The learned Advocate for the appellants has pleaded that they had purchased cone winding machines in CKD condition locally and the goods had been treated as a cone winding machine in CKD form for assessment of goods under Tariff Heading 8455. He has pleaded that the appellants had some attachments such as Cams, Porcelin Guides, Endless Belts, Aluminium Reel Wheels etc., and the total value comes to about Rs. 8,000/- as against the value of the machine at Rs. 2,35,000/- when purchased in CKD form. He has pleaded that the goods already had suffered duty as a machine and after the add-ons in their factory, the goods continued to answer to the description of cone winding machines. He has pleaded by the addition of the motor and starter and a few other items, the character of the machine as such did not change and for the purpose of Excise Tariff, therefore, it cannot be said that a new product had come into existence. He has, therefore, pleaded on prima facie grounds, the appellants have a good case on merits. On limitation he pleaded that there was bonafide belief on the part of the appellants that once the goods had suffered duty as a machine in CKD form, there could not be a levy a second time over on the same machine by reason of certain additions made on the machine.

3. The learned SDR for the department has pleaded, in fact the machines as it was purchased by the appellants was not functional inasmuch as without the motor and starter the same could not have been operated. He has, therefore, pleaded by addition of these items a new machine in a functional form came into existence. He has pleaded the learned lower authority has relied upon a judgement of the Tribunal in the case of M/s. Wandleside National Conductors Ltd. Vs. CCE, Pune reported in 1996 (84) ELT 419. He has referred us to para 9 where in it has been stated an item which emerge in the hands of the appellants out of fabricated parts and bought out items has to be considered as a manufactured product in the hands of the appellants.

4. We have considered the pleas made by both the sides. We observe that it is not in dispute that the appellants had purchased the cone winding machines in CKD form and the same were assessed to duty as machines under Tariff Heading 8445. After purchase of the same, in their factory they have attached the motor, starters and also endless belts and guides to make it functional. We observe that the scheme of the Central Excise Tariff envisages the levy of duty in terms of the interpretative Rule 2A to the Central Excise Tariff Schedule. Once the goods have suffered duty as a particular entity, prima facie duty cannot be fastned again on the same item when after some modifications or additions it continues to answer to the same description. If the plea of the revenue has to be accepted, then any little enhancement of the capability of the machine would require re-assessment of the goods. There is nothing in the Tariff to say that in case where a machine has been assessed in a particular form and if it continues to retain the same form after some additions etc., a further duty can be charged in respect of the same. Prima facie, therefore, we hold that there is force in the plea of the appellants that duty could not be charged a second time over.

5. We, therefore, on prima facie grounds allow the prayer of the appellants for dispensation of the pre-deposit of the duty and penalty.

6. The Registry should post the case in its normal turn.