2002 (4) TMI 391 - AT - Central Excise

Summary

Issues: Classification of rubber parts for compressors and refrigerators under Central Excise Act, 1944.

The judgment involves the classification of rubber parts manufactured by the appellants for compressors and refrigerators under the Central Excise Act, 1944. The Central Excise authorities alleged that the appellants were supplying rubber parts for air-conditioning and refrigerating machinery, which should be classified under sub-heading 8414.92 for compressors and sub-heading 8418.90 for refrigerators. The Commissioner of Central Excise held that the appellants had misclassified the items, resulting in short-levy of duty amounting to Rs. 22,86,665. The Commissioner confirmed the classification under the mentioned sub-headings and imposed penalties under various provisions of the Central Excise Rules, 1944 and the Central Excise Act, 1944.

The appellants appealed against this order, arguing that the classification of the rubber parts should be under Tariff Heading No. 40.16 as claimed by them. They relied on the decision of the Hon'ble Supreme Court in Kohinoor Rubber Mills v. CCE and the Tribunal's decision in T. Manek Lal v. CCE. The respondents, on the other hand, cited the Tribunal's decision in CCE v. G.S. Auto International. The Tribunal considered the submissions and held in favor of the appellants. They noted that the items were manufactured from unhardened vulcanised rubber, falling under Chapter 84, which is covered under Tariff Item 40.16. Section Note 1(a) states that Section XVI does not cover articles of the kind used in machinery or unhardened vulcanised rubber under Tariff Item 40. Therefore, the Tribunal concluded that there was no misdeclaration or suppression by the appellants, and they were not liable to pay any differential duty or penalties. Consequently, the appeal was allowed in favor of the appellants.