2005 (4) TMI 395 - AT - Central Excise

Summary

Issues:
Classification of 'Diesel Coalescer' as part of a machine or a complete item under the Central Excise Tariff Act, 1985.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal passed by the Commissioner of Central Excise & Customs (Appeals), Bangalore, regarding the classification of 'Diesel Coalescer' fabricated by the Respondents. The Original Authority classified it as part of a machine under sub-heading 8479.90, while the Commissioner (Appeals) classified it under sub-heading 8479.10 as a machine with independent functions. The Revenue contended that the 'Diesel Coalescer' should be considered a part of machinery, as its function is to remove water content from diesel oil during refining or crude oil production, requiring a cartridge for this purpose. The Revenue argued that without the cartridge, the water cannot be separated from the diesel oil, thus the 'Diesel Coalescer' is not a machine by itself but a part of machinery.

Smt. Shobha L. Chary, representing the Revenue, emphasized that the 'Diesel Coalescer' cannot function without a cartridge containing filter elements to absorb water content from diesel under high pressure. She argued that the Commissioner (Appeals) erred in classifying it as a machine independently. On the other hand, the learned Advocate for the Respondents explained the manufacturing process and necessity of cartridges for the 'Diesel Coalescer', likening it to cartridges for printers. He supported the findings of the Commissioner (Appeals) and defended the classification of the impugned goods as proper and legal.

Upon reviewing the contentions, the Tribunal analyzed the nature of the 'Diesel Coalescer' and its functionality in removing moisture content from diesel. The Tribunal noted that the steel vessel fabricated by the Respondents is considered a part of the 'Diesel Coalescer' by the Revenue, requiring the fitment of a cartridge to become fully functional. Referring to the definition of a cartridge from the 'Oxford Advance Learners Dictionary,' which describes it as a case containing something used in a machine that can be removed and replaced, the Tribunal concluded that the item fabricated by the Respondents should be considered a machine itself, functional when cartridges are fitted. The Tribunal upheld the Order-in-Appeal by the Commissioner (Appeals), dismissing the Revenue's appeal on the grounds that the 'Diesel Coalescer' should be classified as a machine.