1987 (5) TMI 351 - AT - Central Excise

Summary

Issues: Classification of "Sliding Storage System" under Tariff Item 40 CET, contention of classification under Tariff Item 68 CET or claiming goods as immovable property, whether the product is steel furniture.

In this judgment by the Appellate Tribunal CEGAT, the issue revolved around the classification of the "Sliding Storage System" manufactured by M/s. Nima Limited under Tariff Item 40 CET. The Collector (Appeals) had confirmed this classification, leading to the appeal in question. The appellants contended that the storage system, mounted on fixed rails, should not be classified as steel furniture under Tariff Item 40. However, it was unclear whether they were claiming classification under Tariff Item 68 CET or contending that the goods were not excisable at all, as their appeal memo did not specify a clear classification suggestion. The tribunal noted the ambiguity in the appellants' contentions regarding the classification of the goods.

The tribunal proceeded to provide a detailed description of the sliding storage system, explaining its functionality and fabrication process. The system consisted of movable shelves on parallel rails, allowing access to stored articles by moving the racks. The tribunal emphasized that the system was fabricated in the factory and then installed at the customer's site, making it a complete product when removed from the factory. This clarification aimed to address the appellants' argument that the product should be considered immovable property rather than goods.

Regarding the classification as steel furniture under Tariff Item 40 CET, the tribunal analyzed precedents cited by the appellants. The tribunal distinguished cases involving cinema chairs and storage bins, emphasizing that the sliding storage system, consisting of movable steel racks, should be classified as steel office furniture. The tribunal rejected the applicability of previous decisions that favored the assessee in different contexts, highlighting the unique features of the sliding storage system in question.

Moreover, the tribunal considered a decision by the Bombay High Court regarding motorized storage racks and emphasized the manual movement feature of the sliding storage system under review. The tribunal concluded that the system's functionality as storage racks did not align with the criteria for excluding it from the classification of steel furniture. Additionally, the tribunal addressed the appellants' reliance on a Ministry of Finance letter, clarifying that specially designed steel manufactures for industrial use were not considered steel furniture, but reiterated that the sliding storage system fell under the classification of steel furniture based on the Gujarat High Court's precedent.

In the final analysis, the tribunal affirmed the lower authorities' classification of the sliding storage system under Tariff Item 40 CET, dismissing the appeal based on the detailed examination of the product's characteristics and relevant legal precedents.