2002 (12) TMI 386 - AT - Central Excise

Summary

Issues:
Classification of machinery parts under Central Excise Tariff Act, 1985 - Determination of complete machines vs. parts - Assessment of duty on machines cleared in CKD condition - Interpretation of relevant case laws.

Analysis:

1. Classification of Machinery Parts:
The appeal involved a dispute regarding the classification of machinery parts under the Central Excise Tariff Act, 1985. The appellants argued that they had cleared complete machinery in CKD/SKD conditions to customers. They relied on the judgment in the case of Bhilai Engineering Corpn. Ltd. v. Commissioner of Central Excise, Raipur, which classified certain components as parts of complete continuous casting machines under a specific sub-heading. The appellants contended that if they had cleared parts instead of complete machines, a different judgment would have applied. They referred to the case of M/s. TRF Ltd. v. Commr. of Central Excise, JSR, which held that machines cleared in CKD condition should be assessed as machines and not parts.

2. Assessment of Duty on Machines Cleared in CKD Condition:
The Respondent argued that the rolls cleared by the appellants were parts used in rolling and casting machines, and hence should be classified under a specific sub-heading of the Central Excise Tariff Act, 1985. The Respondent distinguished the facts of the present case from the judgment in TRF Ltd. v. Commissioner of Central Excise, JSR, stating that the rolls were misclassified as machines to evade duty payment. The Respondent also highlighted the relevance of the judgment in the case of Bhilai Engineering Corpn. Ltd. v. CCE, Raipur, which supported the classification of certain components as parts of complete machines.

3. Interpretation of Relevant Case Laws:
The Tribunal noted that the facts in the case records lacked clarity and were ambiguous. Referring to the judgment in TRF Ltd. v. CCE, JSR, the Tribunal emphasized that machines cleared in CKD condition with all components over time should be assessed as machines. The Tribunal directed the Revenue to verify whether certain parts were bought out items, if duty was paid on the total contracted value of the machines, and if the machines were cleared in CKD conditions. The Tribunal clarified that if only rolls were cleared and used in rolling and casting machines, they should be treated as parts under a specific sub-heading. Consequently, the Tribunal set aside the impugned order and remanded the matter to the Commissioner for a fresh decision based on the observations made.

In conclusion, the Tribunal allowed the appeal by way of remand, emphasizing the importance of verifying contracts, payment of duties, and the nature of components cleared to determine the correct classification under the Central Excise Tariff Act, 1985.