2007 (1) TMI 471 - AT - Customs

Summary

Issues:
1. Benefit of Notification No. 20/99-Cus., dated 28-2-1999 under Serial No. 134 allowed for imported goods.
2. Classification of goods under Chapter 72 and use in manufacturing electrical lamination under Chapter 83.
3. Entitlement to benefit of notification based on classification of goods under Customs Tariff Act.
4. Interpretation of Tribunal's decision on classification of electrical laminations.

Analysis:

The appellate tribunal heard an appeal filed by the Revenue against an order granting the benefit of Notification No. 20/99-Cus., dated 28-2-1999 to the respondents for imported goods used in manufacturing electrical lamination. The notification provides a concessional rate of duty for goods classifiable under Chapter 72 or 73 for manufacturing machinery under Chapter 84 or 85 of the Customs Tariff Act.

The main contention revolved around the classification of the imported goods under Chapter 72 and their use in manufacturing electrical laminations classified under Chapter 83 of the Central Excise Tariff Act. The Revenue argued that since the imported goods were not used in manufacturing goods falling under Chapter 84 of the Customs Tariff Act, the respondents were not entitled to the notification's benefit.

Upon reviewing the impugned order and the facts of the case, the tribunal noted that the electrical laminations manufactured using the imported goods were further used in the production of electrical transformers classified under Heading 85 of the Customs Tariff Act. Consequently, the tribunal held that the respondents were indeed entitled to the benefit of the notification based on the classification of the final product.

The Revenue relied on a previous tribunal decision in the case of Hical Magnetics (P) Ltd. v. CCE, Bangalore, which classified electrical laminations made to specific sizes under a different sub-heading of the Central Excise Tariff Act. However, the tribunal found that the imported goods used by the respondents did not fall under Heading 85 of the Customs Tariff Act based on the previous decision, leading to the conclusion that the respondents were not eligible for the notification's benefit.

In light of the above analysis, the tribunal set aside the impugned order and allowed the appeal, emphasizing that the respondents did not meet the classification criteria under the Customs Tariff Act for availing the concessional rate of duty specified in the notification.