2003 (4) TMI 344 - AT - Central Excise

Summary

Issues:
Classification of electrical control panel under Heading 85.37 or Heading 84.15 of the Central Excise Tariff.

Analysis:
The appeal involved a dispute regarding the classification of an electrical control panel manufactured by M/s. Intec Corpn. The main contention was whether the control panel should be classified under Heading 85.37 or Heading 84.15 of the Central Excise Tariff. The Appellants argued that the control panel should be classified under Heading 85.37 as per Note 2(a) to Section XVI of the Tariff. They emphasized that the control panel was not solely identifiable as a part of the air conditioner unit and could operate with various electrical machinery. The Appellants relied on various legal precedents and circulars to support their classification argument.

The Revenue, on the other hand, asserted that the electric control panels were integral components of the air conditioning package unit and were essential for its functioning. They argued that the control panels were specifically designed for use with the air conditioner units and were cleared along with them. The Revenue referred to a Circular and a judgment by the Chennai Bench of the Appellate Tribunal to support their position.

Upon considering the submissions from both sides, the Appellate Tribunal analyzed the classification issue in detail. The Tribunal referred to Note 2 to Section XVI of the Central Excise Tariff, which provides guidelines for classifying parts. It was noted that Rule 2(b) did not apply to parts that constituted an article covered by Chapter 84 or Chapter 85, which supported the Appellants' argument. The Tribunal also highlighted the relevance of the Explanatory Notes of HSN, emphasizing that parts covered by specific headings should be classified accordingly.

The Tribunal found that the control panels were indeed goods included in Heading 85.37 and should be classified under that heading based on the applicable rules and notes. The Tribunal rejected the Revenue's argument that the Circular was merely a guideline, emphasizing that the Board's classification should be followed unless technical information indicated otherwise. As a result, the Tribunal allowed the appeal in favor of the Appellants, concluding that the control panels should be classified under Heading 85.37 and not as part of the air conditioning package unit under Heading 84.15.