Judgment:
1. In this appeal filed by M/s. Mahavir Aluminium Limited, Rajasthan, the issue for our consideration is whether the Sprinkler Equipment manufactured by the appellants was an Agricultural Implement for the purposes of exemption under Notification No. 64/86-CE., dated 10-2-1986 as amended from time to time during the period 1-3-1986 to 28-2-1988.
The Assistant Collector of Central Excise, Jaipur under his Order-in-Original dated 21-12-1988 observed that the assessee was not manufacturing Agricultural Implements but was manufacturing a complete Sprinkler Irrigation System consisting of Aluminium/light galvanised sheet pipes, main line couplers, sprinkler couplers, screwed/flanged coupler bends, tees, end couplers plugs, riser 'quick couplers, riser pipes, battens, gaskets, [clamps] GN Hooks sprinklers, Nuts & Bolts, Sprinkler adopters, reducer couplers, [increaser] couplers, riser outlet tees, mainline valve couplers, insert valve openers, ball joint riser couplers, ball valve couplers, spigot adaptors, sleeve couplers, sleeve bends, groove clamp couplers, groove clamp tees, groove clamp end stops garden stands, etc. He held that the product in question could not be termed as an Agricultural Implement, and referred to the Dictionary meaning of the word 'Implement'.
2. On appeal, the Collector (Appeals), Central Excise, New Delhi confirmed the Order-in-original and in Para 4 of her order, she held as under :- "4. I have carefully considered the various submissions made by the appellants. From the catalogue produced by the appellants, it is observed that the 'Sprinkler System' is a common type which is used in parks, gardens and lawns as well as in the fields. It is observed in this context when an item is meant for various uses, ISI specifications are laid down for specific uses. In the present case, it is not the claim of the appellants that during the relevant period the goods in question were as per ISI Specification for agricultural implements and were sold to the customers mentioning such specifications nor does the classification list filed for the relevant period mention such specification. It is also a fact that the goods in question have been specifically exempted from duty which effect from 1-3-1988 under a separate notification despite the existence/continuance of Notification No. 64/86. In the circumstances, I find no ground to interfere with the impugned order passed by the Assistant Collector disallowing exemption under Notification No. 64/86 for the goods in question during the relevant period. The appeal is accordingly rejected.
3. We have heard Shri Gopal Prasad, Advocate for the appellants and Shri A.K. Agarwal, SDR for the respondent/Revenue.
4. Shri Gopal Prasad, Advocate stated that the Sprinkler Irrigation System manufactured by the appellants was for agriculture and was an implement. He referred to the exemption Notification No. 64/86-C.E., dated 10-2-1986 as in force prior to 1-3-1988 and Notification No.111/88-C.E., dated 1-3-1988. There was no dispute that w.e.f. 1-3-1988 the goods manufactured by the appellants were covered by the description mechanical appliances used in agriculture or horticulture.
It was his submission that even before the issue of Notification No.111/88-C.E., dated 1-3-1988 their goods were covered by the exemption under Notification No. 64/86-C.E., dated 10-2-1986 as amended. He referred to the Calcutta Collectorate Trade Notice No. 139/86-C.E., which had clarified that the Sprinkler Irrigation Equipment was to be classified under Heading No. 8424.00 of the Tariff as mechanical appliances for Sprinkler liquids. He further referred to the Jaipur Collectorate Trade Notice No. 51/94, dated 11-7-1994 wherein it had been viewed that the agricultural implements included agricultural mechanical appliances/machinery and were eligible for the benefit of exemption under Notification No. 64/86-C.E. as amended by Notification No. 196/86-C.E., dated 14-3-1986. He also referred to the information given by one Shri S.K. Rastogi, Consulting Engineer and one given by Shri A. Alam, Assistant Director General (Engg.) in the Indian Council of Agricultural Research. He submitted that the Experts' information could not be brushed aside without adequate reasons. He also mentioned that in Bangalore Collectorate identical items had been classified under Heading No. 8424.00 and had been given the benefit of Notification No. 64/86-C.E., dated 10-2-1986 as amended.
5. In reply, Shri A.K. Agarwal, SDR stated that the benefit of exemption under Notification No. 64/86-C.E. was limited only in the agricultural implements and that the goods in question as described by the appellants and as discussed by the Assistant Collector and the Collector (Appeals) were not implements. He submitted that prior to 1-3-1988 the benefit of exemption under Notification No. 64/86-C.E. was limited only to the agricultural implements and parts thereof. From 1-3-1988 the scope of the exemption was extended to cover mechanical appliances of a kind used in agriculture and horticulture. It was his plea that the expression "Agricultural Implements" and parts thereof were falling under Chapter 82 of the new Central Excise Tariff.
Subsequently, the coverage was extended to such agricultural implements and parts thereof which were also classified under Chapter 84 of the said Tariff. The * appellants has named their product as Mahavir Sprinkler Irrigation System. It is seen from the product - literature that it was made of extruded (seamless) Aluminium Pipes, Quick couplers and sprinkler. The adjudicating authority had referred to various components of the Sprinkler Irrigation System and the relevant extracts from the adjudication order had already been summarised above. The expression used in the relevant exemption notification is 'implement'.
The system as described above does not appear to be in the nature of an implement. In the case of U.O.I. v. State of Mysore -1977 (1) E.L.T. (J 26) the Supreme Court had referred to the agricultural implements as the basic tools of trade by which a vast majority of the citizenns of the country earned their livelihood. They had referred to the shovels and spades as agricultural implements.
6. There are a number of other decisions in the Sales Tax cases where the term 'implement' had come-up for discussion. The discussion in these cases referred to the relevant Tariff Entry in the Sales Tax Law with which we are not concerned in the present proceedings. It is however, seen that the term 'implements' had been referred to such goods which are particularly used for agriculture. Reference may be made to the following decisions :- (1) The M.P. State Co-operative Marketing Societies v. CCE - 1971 (27) STC (MP) at page 45; (3) Karnal Machinery Store v. Assessing Authority - (1973) 31 STC at page 3 Punjab & Haryana at Chandigarh.
7. The ld. Advocate had submitted that there are some other decisions in the Sales Tax Law that the Sprinklers of the nature produced by the appellants were covered within the expression agricultural implements.
As we have noted above, the Sales Tax cases deal with the relevant Tariff Entry in the respective enactments and while there may not be relevance of those decisions it appears to us that the goods as discussed above, were not in the nature of implements. With effect from 1-3-1988 the scope of exemption was extended to mechanical appliances of a kind used in agricultural or horticulture. There is no dispute that from 1988 the Department had agreed that the goods in question were mechanical appliances and were covered by the exemption Notification No. 111/88, dated 1-3-1988. As we are only concerned with the entry in the exemption Notification as prior to 1-3-1988 when the reference was only to the implements and not to the mechanical appliances, we do not find any infirmity in the views taken by the Collector of Central Excise (Appeals), New Delhi. In view of the above discussion, the appeal is rejected. Ordered accordingly.