2001 (10) TMI 600 - AT - Central Excise

Summary

Issues involved:
Classification of Heading Elements under Central Excise Tariff Act - Heading 85.14 or Heading 85.16

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved the classification of Heading Elements manufactured by M/s. Escorts Ltd. under the Central Excise Tariff Act. The primary issue was whether these elements should be classified under Heading 85.14, as claimed by the appellant, or under Heading 85.16, as confirmed by the Commissioner (Appeals) in the impugned order.

Upon hearing arguments from both sides, the Commissioner (Appeals) classified the product under Heading 85.16, relying on a previous decision by the Appellate Tribunal in the case of the appellants. The Tribunal emphasized that Heading 85.16 covers a wide range of products beyond domestic appliances, including industrial applications like heating units for vehicles and road heating equipment. The Tribunal rejected the appellant's argument that Heading 85.16 applies only to domestic appliances, stating that this contention lacks a basis.

The Commissioner in a previous order had also addressed the classification of the product as heating elements under Heading 8516. The Commissioner noted that even if the goods manufactured were heating elements, they would still fall under Heading 8516, which specifically includes electric heating resistors. The Explanatory Note to Heading 8516 clarifies that all electrical heating resistors are classified under this heading, irrespective of the equipment they are used in. The Commissioner highlighted that parts falling under Chapter 84 or Chapter 85 are to be classified accordingly, as per Section note No. (2)(a).

The Tribunal mentioned that the appeal filed by M/s. Escorts Ltd. against the decision had been admitted by the Supreme Court, but no stay was granted. Following the previous decision by the Tribunal in the appellant's matter, the Tribunal upheld the classification of the goods under Heading 85.16. However, the Tribunal agreed with the appellant that the penalty under certain Central Excise Rules was not warranted as they had filed a classification declaration.

In conclusion, the appeal was disposed of with the decision that the Heading Elements manufactured by M/s. Escorts Ltd. are classified under Heading 85.16 of the Central Excise Tariff. The Tribunal also ruled that no penalty was warranted in this case due to the filing of the classification declaration by the appellant.