2005 (1) TMI 461 - AT - Central Excise

Summary

Issues:
Classification of Electronic Test and Measuring Instruments - Dispute over classification under Central Excise Tariff Act, 1985.

Analysis:
The appellants, engaged in manufacturing Electronic Test and Measuring Instruments, specifically Signal Generators, were embroiled in a classification dispute under the Central Excise Tariff Act, 1985. The crux of the matter revolved around the classification of the products under Heading 9031.00 as desired by the appellants, as opposed to the department's insistence on classifying them under Heading 8543.00. The Assistant Commissioner initially approved the classification under Heading 9031.00, but subsequent departmental actions, including a Review Application before the Collector (Appeals), led to the classification under Heading 8543.00. Show Cause Notices were issued for duty demands and penalties under Rule 173Q due to alleged improper classification and duty evasion. The Assistant Commissioner upheld the demands, denying benefits under Notifications 31/93 & 46/94, which were further confirmed in appeal by the Commissioner (Appeals), prompting the appellants to file the present appeals.

Upon thorough consideration, the Tribunal made the following key observations and determinations:

(a) Classification under Heading 8543.20: The Tribunal noted that signal generators fell under Heading 8543.20 of the HSN, covering electrical appliances and apparatus producing electrical signals of known waveform and magnitude at an assignable frequency. The Chapter Note to HSN and the CETA 1985 were deemed relevant, confirming the classification under Heading 8543.20, encompassing apparatus like impulse generators, pattern generators, and wobbulators. Thus, the Tribunal confirmed the classification under Heading 8543.20.

(b) Validity of Duty Demands: The Tribunal dismissed the argument that duty demands were invalid due to alleged erroneous classification. It upheld the correctness of the classification under Heading 8543.20, rejecting the appellant's claim that the products should be classified under Heading 9031.00. The Tribunal emphasized that the products were more specifically known and understood as signal generators, distinct from general measuring and checking instruments falling under Chapter 90, thus rejecting the appellant's plea.

(c) Penalty Imposition: Considering that the appellants had initially obtained a different approved classification from the department, which was subsequently changed to Heading 8543, and the penalty was imposed for failing to pay duty under the revised classification, the Tribunal found no grounds to interfere with the penalty. The appellants were obligated to pay duty under Heading 8543 despite contesting the classification, and their failure to comply warranted the penalty.

In light of the above findings, the Tribunal concluded that the appeals lacked merit and ordered their dismissal, affirming the duty demands and penalty imposition under the correct classification of the products.