2001 (10) TMI 928 - AT - Central Excise

Summary

Issues involved:
Classification of parts/components of Harvester Combine under Heading 84.33 or sub-heading No. 8483, availability of benefit under Notification No. 67/95-C.E., correct valuation of parts, availability of Modvat credit, and imposition of penalty.

Classification Issue Analysis:
The appellant claimed that parts used in the Harvester Combine should be classified under Heading 84.33, citing suitability for use with the machine. Reference was made to a Tribunal decision regarding classification of parts of an I.C. Engine. However, the respondent argued that parts should be classified under Heading 84.83 as per the Tariff rules. The Tribunal noted that some parts were specifically included in Heading 84.83 and should be classified accordingly, despite their use with the Harvester Combine. The Commissioner was directed to reclassify all parts based on this guidance.

Valuation Issue Analysis:
Regarding valuation, the appellant contended that the value should not be based on spare market prices but determined using the cost construction method. The Tribunal agreed, referencing a case involving engines sold as spares. The assessable value of parts used in the Harvester Combine should be redetermined following this method. Modvat credit eligibility was confirmed, subject to furnishing duty paying documents to the Central Excise Authority.

Penalty Issue Analysis:
The issue of penalty imposition was raised by the respondent due to mis-declaration of goods' classification. The Tribunal left this decision to the Adjudicating Authority for reconsideration during the fresh adjudication process. The appellant's argument that penalty should not be imposed based on the interpretation of the tariff as a legal question was noted.

Conclusion:
The Tribunal directed the Commissioner to reclassify parts based on the Tariff rules, redetermine the valuation following the cost construction method, and allow Modvat credit upon submission of relevant documents. The question of penalty imposition was deferred for reconsideration during the fresh adjudication process.