2003 (4) TMI 311 - AT - Central Excise

Summary

Issues: Classification of bobbins and spools for transformers under Heading 8504.00 or 3926.90

In this judgment, the main issue at hand is the classification of bobbins and spools used for transformers under Heading 8504.00 or 3926.90. The Department appealed against the lower authority's decision, arguing that the items should be classified under 3926.90, while the Respondents contended that they should be classified under Heading 8504.00 as parts of transformers.

The Commissioner (appeals) analyzed the HSN chapter notes and concluded that the bobbins and spools in question were specifically designed for use in transformers and did not possess characteristics of items used for packing or conveying materials. Therefore, the Commissioner classified them under Heading 8504.00 as parts of transformers, rather than under 3926.90.

The judgment referred to a previous case involving Sasta Plastics India (P) Ltd., where the classification of spools for TV parts was discussed. The bench in that case determined that the spools made of plastic, used as part of transformers, should be excluded from Section XVI and classified under Heading 39.23 instead of 85.30. This decision was based on the understanding that spools made of plastic and used for wire winding were not limited to yarn winding/unwinding, as indicated by the exclusion notes.

Additionally, the judgment addressed the reliance of the respondents on a previous case involving Chamundi Textile (Silk Mills) Ltd., where spools made of plastic were imported along with machines. However, the present case involved individual clearance of spools, not as part of a machine set, leading to a different classification under Chapter 39.

Furthermore, the appellants argued that the presence of metallic pins attached to the bobbins and spools should influence the classification. However, it was determined that the essential characteristic of the goods was predominantly plastic, as per the exclusion notes in the Central Excise Tariff Section XVI, leading to classification based on the predominant material.

Lastly, the judgment emphasized that customs notifications and DGFT input/output norms should only be considered for classification when the Tariff Section and HSN head notes do not provide clear guidance. In this case, the classification was determined based on the predominant material of the goods, i.e., plastic. Ultimately, the Commissioner (Appeals) Order was set aside, and the order of the Assistant Commissioner was restored, disposing of the appeal accordingly.