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Judgment
The issue that we are concerned with in these appeals arises in the context of claims for refund of excise duty. It pertains to the meaning of the phrase 'component parts'. The Tribunal, in the impugned order, draw a distinction between component parts and spare parts, following its earlier decision in the case of Vaz Forwarding Pvt. Ltd. v. Collector of Customs 1983 (43) E.L.T. 358 (Tribunal). Component parts, according to it, were those which were initially used in the assembly or manufacture of a machine and spare parts were those parts which were used for the subsequent replacement therein of worn out parts. The decision in Vaz Forwarding Pvt. Ltd. and other decisions of the Tribunal were considered by a Larger Bench of the Tribunal in 1997 (72) ECR 98 . The Larger Bench took the view that a spare part was a replacement part to replace a damaged or worn out component but it was, nevertheless, a component part. 'Component' was the 'genus' and 'spare' was a species thereof; it was a component which was used for replacement. The Larger Bench judgment found that the distinction drawn in Vaz Forwarding Pvt. Ltd. was a distinction without a difference.
The Larger Bench decision followed decisions of this Court, and we are of the view that its view is correct. A spare part, though fitted into a machine subsequent to its manufacture, to replace a defective or worn out part becomes a component of the machine. It is a component part.
The appeals succeed and are allowed. The order under appeal is set aside, but the appellants shall be entitled to refunds only if permissible under the law.
No order as to costs.