2002 (3) TMI 331 - AT - Central Excise

Summary

Issues:
Classification of hydraulic distribution assembly under heading 87.08 or 84.79 of the Schedule to the Central Excise Tariff Act.

Analysis:

1. Issue of Classification - Heading 87.08 vs. Heading 84.79:
- The appellant contended that the hydraulic distribution assembly should be classified under heading 84.79 as an independent mechanical appliance suitable for various hydraulic circuits, not solely for motor vehicles.
- Reference was made to the Explanatory Notes of HSN, indicating that products falling under Heading Numbers 84.01 to 84.79 should not be classified under Heading 87.08.
- The appellant highlighted the definition of "individual function" from the HSN, providing examples like air humidifiers and engine starters under Heading 84.79.

2. Appellant's Arguments:
- The appellant emphasized that the hydraulic distribution assembly performs distinct functions in various hydraulic circuits, supporting its classification under Heading 84.79.
- Previous tribunal decisions were cited to strengthen the argument, including a case where a hydraulic pump was classified under sub-heading 8413.80 instead of 87.08 based on Note 2(e) to Section XVII.

3. Revenue's Counter-arguments:
- The Revenue argued that the hydraulic distribution assembly was specially designed for tractors and should be classified under Heading 87.08 as parts and accessories suitable for motor vehicles.
- Reference was made to the Commissioner (Appeals) findings and the case law of CCE, Chandigarh v. G.S. Auto International to support the classification under Heading 87.08.

4. Judgment and Conclusion:
- The Tribunal analyzed the provisions of Section XVII, Notes 2 and 3, and the Explanatory Notes of HSN to determine the classification.
- It was concluded that the hydraulic distribution assembly, performing an individual function of distributing oil in hydraulic circuits, falls under Heading 84.79 as machinery with individual functions, not under Heading 87.08 for motor vehicle parts.
- The Tribunal rejected the Revenue's argument based on Note 3 to Section XVII, citing a previous case where Note 3 was not considered to override Note 2.
- The decision in G.S. Auto International was referenced, emphasizing the importance of evidence and interpretation of relevant provisions in determining classification.

In summary, the Tribunal allowed the appeal, classifying the hydraulic distribution assembly under Heading 84.79 instead of Heading 87.08, based on its individual function and compatibility with various hydraulic systems beyond motor vehicles.