2004 (3) TMI 640 - AT - Central Excise

Summary

Issues:
Classification of 'On Load Top Changer' under Chapter sub-heading 85.04 vs. Chapter Heading 85.37 of the Schedule of the CETA, 1985.

Analysis:
The appeal before the Appellate Tribunal CESTAT, CHENNAI involved a dispute over the classification of the 'On Load Top Changer' manufactured by the assessees/respondents. The Revenue challenged the order of the Commissioner of Central Excise (Appeals) that accepted the claim of the assessees for classification under Chapter sub-heading 85.04, setting aside the classification by the Assistant Commissioner under Chapter Heading 85.37. The Assistant Commissioner had classified the item under Chapter Heading 85.37 as equipment for electrical control or distribution of electricity. However, the Commissioner (Appeals) accepted the alternate classification under Chapter Heading 85.04 as part of the transformer, based on the argument that the 'On Load Top Changer' is an integral part of the transformer and performs specific functions related to transformers only.

Upon hearing both sides, the Tribunal noted that the Commissioner (Appeals) had relied on an earlier Order-in-Appeal where an expert confirmed that the 'On Load Top Changer' is indeed a part of a transformer. However, there was no expert opinion specifically on the disputed item in the present case. In the interest of justice, the Tribunal decided to set aside the impugned order and remand the case for a fresh decision after obtaining an expert opinion on the disputed item. The Tribunal directed that the jurisdictional Deputy Commissioner/Assistant Commissioner should pass fresh orders after providing a reasonable opportunity of hearing to the assessees.

In conclusion, the appeal was allowed by remand, emphasizing the need for a thorough examination of the classification issue based on expert opinion regarding the nature and function of the 'On Load Top Changer'. The decision highlighted the importance of precise classification under the relevant chapters of the CETA, 1985, to ensure accurate assessment of duties and taxes applicable to the item in question.