2003 (11) TMI 372 - AT - Central Excise

Summary

Issues: Classification of Chaff Cutter Blades under Heading No. 84.36 or Heading No. 82.08 of the Central Excise Tariff Act.

Analysis:
1. Issue of Classification: The appeal raised the question of whether Chaff Cutter Blades manufactured by M/s. Nice Steel Industries should be classified under Heading No. 84.36, as confirmed by the Commissioner (Appeals), or under Heading No. 82.08 as claimed by the Revenue. The Departmental Representative argued that the blades are specifically covered under Heading 82.08 for knives and cutting blades for machines, citing relevant rules and case laws to support their position.

2. Department's Argument: The Departmental Representative contended that Chaff Cutter Blades fall under Heading 82.08 as they are specifically designed for mechanical appliances used in agriculture. They emphasized that unmounted blades for machines are classified under this heading as per the Explanatory Notes of HSN, and the application of Note 2 to Section XVI does not cover goods of Chapters 82 and 83. They relied on judicial precedents to support their stance.

3. Respondent's Argument: The Respondent's Advocate argued that Chaff Cutter Blades are integral parts of the Chaff Cutter machine and should be classified under Heading 84.36. They highlighted that the blades are essential for the functioning of the machine and cannot be used for any other purpose. They referred to Section Note 2(b) of Section XVI, which states that parts suitable for use solely with a particular machine should be classified with the machine.

4. Judgment and Analysis: The Tribunal examined the rival Tariff Headings and concluded that the Chaff Cutter Blades are specifically covered by sub-heading 8208.40, which falls under Heading 82.08 for knives and cutting blades for agricultural, horticultural, or forestry machines. The Tribunal applied Rule 1 of the Interpretative Rules, giving precedence to the specific Heading over the general Heading. They emphasized that Note 1(k) to Section XVI excludes articles of Chapter 82 from Section XVI, thus rejecting the application of Note 2 to Section XVI for classification under Heading 84.36.

5. Explanatory Notes and Trade Notice: The Tribunal also referred to the Explanatory Notes of HSN, which supported the classification of blades under Heading 82.08 for agricultural machines. They dismissed the reliance on the Trade Notice issued by the Chandigarh Commissionerate, noting that it did not specifically mention the classification of Chaff Cutter Blades under Heading 84.36. Consequently, the Tribunal allowed the appeal filed by the Revenue, affirming the classification of the Chaff Cutter Blades under Heading 82.08.

In conclusion, the judgment resolved the issue of classification by determining that the Chaff Cutter Blades should be classified under Heading 82.08 of the Central Excise Tariff Act, rejecting the contention for classification under Heading 84.36. The decision was based on the specific nature of the blades for agricultural machines and the application of relevant interpretative rules and legal precedents.