2004 (6) TMI 518 - AT - Central Excise

Summary

Issues:
1. Whether the benefit of Notification No. 87/89-C.E., dated 1-3-89 is available to the Television sets manufactured by both the respondents.

Analysis:
The appeals filed by Revenue raised the issue of whether the concessional rate of duty under Notification No. 87/89-C.E. applied to the Television sets manufactured by the respondents. The Additional Commissioner confirmed the duty demand against the respondents for manufacturing TV sets with remote control facility, imposing penalties and confiscating goods. However, the Commissioner (Appeals) set aside these orders, stating that the TV sets were without remote control facility when cleared from the factory.

The Department argued that the TV sets had built-in remote control facility, supported by evidence that some buyers handpicked remote units from dealers to use with the TV sets. Statements from production managers and engineers confirmed the presence of remote control signal receiving components in the TV sets, regardless of whether a remote handset was supplied. As per the Notification, duty rates were based on the presence of remote control facility, justifying the higher rate for sets with this feature.

In response, the Consultant for the respondents contended that TV sets were cleared without handsets, which were separately invoiced. Referring to a Department of Electronics letter, it was argued that a TV set was classified with remote control only if sold with a handheld unit, emphasizing that the presence of a remote control signal receiver did not automatically classify a set as having remote control facility.

The Tribunal considered both arguments and evidence presented. It acknowledged that the respondents manufactured TV sets with built-in remote control, cleared handsets separately, and that the remote control facility was tuned to a specific frequency, usable only with sets from the same manufacturer. Customers were observed purchasing both TV sets and handsets together, indicating the sets were designed for remote control use. Distinguishing the present case from precedent, where handsets were not cleared separately, the Tribunal concluded that the TV sets in question were to be treated as having remote control facility. Consequently, the impugned orders were set aside, and both appeals by the Revenue were allowed.