2004 (6) TMI 363 - AT - Central Excise

Summary

Issues:
Classification dispute involving machines manufactured and cleared by the assessee to textile mills during 1990-91.

Analysis:
1. The appeal involves a classification dispute regarding machines manufactured and cleared by the assessee to textile mills during 1990-91. The Commissioner (Appeals) classified the machines under Heading 84.48, while the department contended that the goods should be classified under Heading 84.79. The challenge in the appeal pertains to the classification of a specific machine used for mounting card clothing on carding cylinders, although the department claimed that the classification of all machines was in dispute.

2. The impugned machines are identified as mounting machines used to replace old parts on textile machines. Specifically, the classification dispute revolves around the machine for mounting card clothing on carding cylinders. The classification of other machines was already decided by the Commissioner (Appeals).

3. The classification of the machine for mounting card clothing on carding cylinders was debated thoroughly. The Revenue argued that this machine has an independent function of replacing worn-out card clothing on carding cylinders, not directly associated with textile machines under Headings 84.44 to 84.47. The HSN Notes on Heading 84.79 categorically place this machine under Item No. 13 in Part III. However, the respondents argued that when the Tariff Heading is clear, HSN Notes should not be considered. They contended that Heading 84.48 is functionally specific to the machines in question. The Revenue relied on Supreme Court judgments emphasizing the importance of HSN Explanatory Notes in tariff classification.

4. After careful consideration, the Tribunal found that the machine in question was not specifically mentioned under Heading 84.48 but was explicitly listed under HSN Heading 84.79. The machine's function of replacing worn-out card clothing on carding cylinders was deemed independent and not integrally connected to the continuous manufacturing process associated with the carding cylinder. Therefore, the Tribunal upheld the Revenue's appeal, classifying the machine under Heading 84.79 and setting aside the lower appellate authority's classification decision.

This detailed analysis of the judgment highlights the classification dispute, arguments presented by both sides, reliance on legal precedents, and the final decision reached by the Tribunal regarding the classification of the machine in question.