Excise Duty Exemption Not Available On Industrial Sewing Machines With In-Built Motors: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that excise duty exemption not available on industrial sewing machines with in-built motors. Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) were addressing the issue of whether the assessee is entitled to the benefit of exemption Notification No. 6/2006-CE dated 1.3.2006 (S. No. 15) and its successor Notification No. 1/2011CE dated 1.3.2011 (S. No. 97) on the manufacturing of industrial sewing machines with in-built motors. In this case, the assessee/appellant had manufactured and cleared sewing machines meant for stitching bags and that each of these machines had a motor and they were not meant for manual stitching. The sewing machines when they were cleared from the factory had the motors in them. The motor was part of the sewing machine and was not an optional accessory. The motor was connected to the sewing mechanism through a belt and the motor, the belt and the sewing mechanism all have proper housing and are covered. According to the Revenue the sewing machines, being with in-built motors, were not eligible for exemption under Notifications No. 6/2006-CE and 1/2011-CE. As per the assessee although the motor was part of the sewing machine as cleared from the factory and although the motor was housed and covered in the machine, since the motor and the sewing mechanism were connected by a belt and not though a shaft, the motor cannot be said to be inbuilt in the sewing machine. Therefore, the assessee was entitled to the benefit of the exemption notifications. The Tribunal noted that the benefit of the notifications is available to sewing machines without in-built motors. The notification does not stipulate any mechanism of transmission of the power from the motor to the sewing unit. The notification does not stipulate any particular mechanism of transmission of power from the motor to the sewing mechanism. So long as there is an in-built motor in the sewing machine, it is not eligible for exemption and if there is no in-built motor, it is eligible for exemption, opined the bench. The bench stated that the assessee is not entitled to the benefit of the exemption notifications. The Tribunal further stated that none of the elements necessary to invoke extended period of limitation was present in the case. Therefore, the demand for extended period of limitation deserves to be set aside. In view of the above, the Tribunal partly allowed the appeal by setting aside the demand for the extended period of limitation and penalty under section 11AC. Case Title: M/s Swarup Mechanical Works (Unit 1) v. Additional Director General (Adj.), Director General of GST Intelligence Case Number: EXCISE APPEAL NO. 52049 OF 2022 Counsel for Appellant/ Assessee: R.K. Hasija Counsel for Respondent/ Department: Rakesh Agarwal Click Here To Read/Download The Order

Excise Duty Exemption Not Available On Industrial Sewing Machines With In-Built Motors: CESTAT

Mehak Dhiman

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Excise Duty Exemption Not Available On Industrial Sewing Machines With In-Built Motors: CESTAT

Mehak Dhiman

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

This is a premium content
Available exclusively to
Our subscribers