Judgment:
1. In this appeal filed by the Revenue, the matter relates to the classification and eligibility for exemption of Coal Fired Boiler.
Under Exemption Notification No. 120/81-C.E., dated 15-5-1981 (as amended), among others, Agricultural and Municipal Waste Conversion Devices Producing Energy, falling under Tariff Item 68 of the erstwhile Central Excise Tariff, were exempted from the whole of the duty of excise leviable thereon. The appellants described their goods as "Enpak Energy Coal Fired Boiler IBR" and paid appropriate excise duty as leviable under Tariff Item 68 of the Tariff. Subsequently, they filed a refund claim on the ground that the goods manufactured by them were Agricultural and Municipal Waste Conversion Device Producing Energy and were eligible for exemption under Notification No. 120/81-C.E.aforesaid. The refund claim was rejected by the Assistant Collector of Central Excise, Ahmedabad on the ground that the Boiler in question was specially designed for operating on coal and not specially designed to be fired on agricultural waste. The Collector of Central Excise (Appeals), Bombay, however set aside the order passed by the Assistant Collector of Central Excise, Ahmedabad. He took the view that as the Boiler in question was capable of using Agricultural and Municipal Waste, the appellants were eligible for the benefit of Notification No.120/81-C.E.2. The matter was called; None is present for the respondents. The notice of today's hearing had been issued on 10-9-1996. Earlier the matter had come-up on 29-8-1996 when on the request of the respondents the matter had been posted for today. As there is no response to the notice and there is no request for adjournment, we are proceeding to deal with this matter on merits after hearing Shri M. Jayaraman, JDR, who is present for the appellants/Revenue.
3. Shri M. Jayaraman, JDR submitted that the Coal Fired Boiler was specially designed for operating on coal and the same could not be covered within the expression "Agricultural and Municipal Waste Conversion Device Producing Energy". The fact that it was capable of using Agricultural & Municipal Waste will not make it eligible for exemption under Notification No. 120/81-C.E. unless it was specially designed for operating on Agricultural and Municipal Waste.
4. We have carefully considered the matter. The respondents had cleared the goods in question vide GPI No. 7, dated 31-3-1986 as Enpak Energy Coal Fired Boiler IBR. The Boiler in question was specially designed for operating on coal. The fact that it was capable of using Agricultural and Municipal Waste will not change the classification if it had been specially designed for operating on coal.
5. The respondents had paid excise duty as applicable to the Coal Fired Boilers under Tariff Item No. 68 of the erstwhile Central Excise Tariff. Subsequently, they filed a refund claim. The ground taken by them was that the Boiler manufactured by them could use bio-gas and Agricultural products. No material was placed to show that the Boiler in question was specially designed for operating on Agricultural and Municipal Waste. The Asstt. Collector of Central Excise, Ahmedabad, who had adjudicated the matter, had come to a finding of fact that the assessee had actually manufactured and cleared the Coal Fired Boilers.
6. In the Trade Notice relied upon by the respondents, the matter related to the rice husk-fired boiler. The Boiler had been specially designed for operating on rice husks. The Board clarified under F. No.13/36/84-CX 1, dated 14-4-1986 that the rice husk - fired boiler could be considered as Agricultural and Municipal Waste Conversion Device Producing Energy so long as it is specially designed for operating on rice husk though it may also be capable of using other conventional fuels. The matter here is different. The Boiler was specially designed for operating on coal though it could be capable of using other non-conventional fuels also.
7. In the case of Eskayef Limited v. CCE - 1990 (49) E.L.T. 649 (SC), the Supreme Court had laid down that use of a particular product for other purposes would not change the classification of that product. The Supreme Court was concerned with the classification of the products - Neftin 50 and Neftin 200 as patent and proprietary medicines or.as animal feed. The Supreme Court had held that merely because Neftin 50 and Neftin 200 could also be used for improving egg production and increase in growth-rate of broilers it would not in any way detract from the fact that the said products were medicines for use in the treatment and prevention of ailments in poultry.
8. As the Boiler under consideration was specially designed for operating on coal and was not specially designed for operating on Agricultural and Municipal Waste, we consider that it could not be classified as Agricultural and Municipal Waste Conversion Device Producing Energy. Thus, it was not eligible for the benefit of Exemption Notification No. 120/81-C.E., dated 15-5-1981 as amended. In the circumstances, the views taken by the ld. Collector of Central Excise (Appeals) was not correct. We set aside the impugned Order-in-Appeal and restore the Order-in-Original. The appeal filed by the Revenue is thus allowed. Ordered accordingly.