1. The question involved in this case is whether Filters KFF-1002 used in Dumpers and Haulers are liable to duty as "Parts and accessories of Motor Vehicles, N.O.S." under Item 34-A of the Central Excise Tariff and whether duty was due on such Filters removed by the party without payment of duty during the period from 1-3-1973 to 31-5-1975.
2. Shri Setalvad stated that the Filters in question are manufactured by the appellants in accordance with the drawings and specifications of Kirloskar Cummins Ltd. The said Filters cannot be used in any internal combustion engines other than the internal combustion engines manufactured by the Kirloskar Cummins Ltd. Over 90% of the engines manufactured by Kirloskar Cummins Ltd. are utilised in stationary and industrial applications such as pumps, compressors, drilling rigs, generator sets, etc. and only about 10% of the engines are used in application such as dumpers. Shri Setalvad also added that Filter can never fall under Tariff Item 34-A, but being part of an internal combustion engine falling under Item 29 must rightly be held as subject to tax under the residuary entry of Item 68. In support of his arguments, Shri Setalvad relied inter alia on the decision of Bombay High Court in the case of Kirloskar Cummins Ltd. v. N. K. Kapoor and Ors. (1980 E.L.T. 557) in when the said High Court had established the principle of predominant use for classifying the goods in question.
3. The learned Departmental Representative has not disputed the basic facts urged by the appellants, that is to say, that the Filters in question are manufactured in accordance with the drawings and specifications of Kirloskar Cummins Ltd. and that over 90% of the engines manufactured are utilised in stationary and industrial applications.
4. We have carefully considered the matter and hold that in view of the fact that, it is not disputed that the Filters in question are predominantly utilised in stationary and industrial applications, it would be incorrect to classify them as parts of Motor Vehicles. We, therefore, hold that the subject Filters were not chargeable to Excise Duty as applicable to Motor Vehicle Parts.
5. We allow the appeal accordingly with consequential relief to the appellants.