2006 (8) TMI 78 - AT - Central Excise

Classification As per the department both Receiver and Accumulator (both used as parts of refrigerating machinery) classified under SH 8418.90 but lower appellate authority is not agree with it Matter remanded to original authority for correct classification

Summary

Issues: Classification of "Receiver" and "Accumulator" parts of refrigerating machinery under different sub-headings.

In this case, the department appealed against the classification of "Receiver" and "Accumulator" parts of refrigerating machinery by the lower appellate authority under SH 7326.90 and Sub-Heading 8479.10 respectively, while the department wanted them classified under SH 8418.90. The dispute revolved around whether these parts should be classified under SH 8418.90 as parts of refrigerating equipment or under other sub-headings. The respondents argued that the "Accumulator" performs a special independent function and should be classified under SH 8479.10, while the "Receiver" should fall under SH 7326.90 as other articles of iron and steel. The respondents relied on a trade notice issued by the Vadodara Collector of Central Excise classifying these parts under different sub-headings. The department contended that such trade notices cannot interfere with the quasi-judicial powers of officers and that the power to classify goods is a legislative function that cannot be delegated.

The lower authorities followed the trade notice for classification, leading to a debate on the validity and binding nature of such notices. The department argued that the power to guide Assessing Officers in classifying excisable goods rests with the Board under Section 37B, and that the trade notice issued by the Collector without delegation from the Board cannot be sustained in law. The appellate tribunal found that the power to guide Assessing Officers exclusively lies with the Board, and Rule 233 of the Central Excise Rules cannot be used for classification of goods, which is a quasi-judicial function. The tribunal concluded that the trade notice, being a non est in law, cannot bind the department, and the order based on it was set aside.

As a result of the classification dispute, the tribunal set aside the orders of both lower authorities and remanded the case to the original authority to decide the correct classification of the goods in accordance with law, without considering the trade notice. It was emphasized that the respondents should be given a reasonable opportunity to present their case during the re-evaluation of the classification issue.