2009 (3) TMI 847 - AT - Central Excise

Classification of goods - Boilers - CKD clearance or clearance of parts - classified under CSH 8402.90 or under CSH 8402.10?

Summary

Issues:
1. Classification of boiler parts cleared by BHEL under CSH 8402.90 or CSH 8402.10.
2. Whether the components cleared constituted a machine with the essential characteristics of a boiler.
3. Appeal against the order reducing the demand by the Revenue.
4. Cross-objection filed by BHEL citing relevant case laws and HSN notes.

Analysis:
1. The Tribunal addressed the issue of classification of boiler parts cleared by BHEL under CSH 8402.90 or CSH 8402.10. The Commissioner found that the clearances involved a machine with the essential characteristics of a boiler, classifiable under CSH 8402.10. The impugned components were considered to constitute a boiler in an unassembled condition based on expert opinions obtained. The Tribunal upheld this classification in accordance with statutory provisions and HSN notes, emphasizing the classification of goods as a boiler in unassembled form for transportation convenience.

2. The Tribunal examined whether the components cleared constituted a machine with the essential characteristics of a boiler. Expert opinions and descriptions of parts indicated that the clearances by BHEL were of components required to erect a boiler. The Commissioner's finding that the clearances were of components of boilers against supply orders was supported by the lack of contradictory evidence from the Revenue. The Tribunal referred to the HSN note allowing classification of complete machines cleared in unassembled form under the appropriate heading, affirming the Commissioner's decision on the classification of impugned goods.

3. The Revenue appealed against the order reducing the demand, arguing that a functional boiler could not be erected with the components supplied by BHEL. However, the Tribunal cited a similar case where the essential parts of boilers constituted an incomplete boiler in an unassembled form, which was upheld by the Apex Court. The Tribunal found no reason to interfere with the Commissioner's order, considering the factual similarity and legal precedent.

4. In the cross-objection filed by BHEL, relevant case laws and HSN notes were cited to support their position. The Tribunal referenced decisions from previous cases to strengthen the argument that the impugned components constituted a machine with the essential characteristics of a boiler. The Tribunal dismissed the appeal filed by the Revenue, concluding that the impugned order did not warrant any interference based on the presented evidence and legal precedents.