2007 (5) TMI 9 - SC - Central Excise

Classification Tribunal decided that the appellant product(Actuators) are classifiable under Heading 85.01 of CETA, 1985 which is against the appellant Order of CEGAT upheld

Summary

Issues:
Classification of "Actuators" under the Central Excise Tariff Act, 1985 - conflicting decisions on classification under sub-heading 85.43 or Heading 85.01 - interpretation of Chapter 85 GEN - relevance of HSN - applicability of the decision in CCE v. Guindy Machines Pvt. Ltd. and Audco India Ltd. v. Commissioner of Customs - relevance of the decision in CCE, Bombay v. Siemens (I) Ltd.

Analysis:
The Supreme Court heard appeals challenging the order passed by the Customs Excise and Gold (Control) Appellate Tribunal (CEGAT) regarding the classification of "Actuators" under the Central Excise Tariff Act, 1985. The issue revolved around whether the Actuators should be classified under sub-heading 85.43 as claimed by the appellant or under Heading 85.01 as contended by the revenue. The Commissioner (Appeals) had confirmed the demand made. The appellant relied on the decisions in CCE v. Guindy Machines Pvt. Ltd. and Audco India Ltd. v. Commissioner of Customs to support their classification argument, while the revenue cited the decision in CCE, Bombay v. Siemens (I) Ltd., leading to conflicting decisions on the matter.

The Revenue's counsel argued that the Tribunal had distinguished Guindy's case by stating that the product involved in Siemens' case was an "Electromechanical Actuator" suitable for use with specific machines. The Tribunal referred to factual positions and held that Electric Valve Actuators fell under Heading 85.01, emphasizing that the Actuators were to be classified under this heading based on the Central Excise Tariff. The distinction between Actuators and Electromechanical Actuators was crucial in determining the correct classification under the Tariff Act.

In support of the appeal, the appellant reiterated their stance before the CEGAT, emphasizing that reliance on the Harmonized System of Nomenclature (HSN) was only applicable to identical goods, which was not the case in the present situation. The appellant sought to clarify the classification based on the distinct features of the Actuators in question.

The Court delved into the scope and structure of Chapter 85 GEN, highlighting the categories covered under the chapter, including machinery for electricity production, electromechanical apparatus, and instruments for sound recording. The Court examined the specific provisions related to electric motors and generators under Heading 85.01, emphasizing the definition of electric motors as machines for transforming electrical energy into mechanical power. The Court also referenced the group description of Valve Actuators electrical to elucidate the criteria for classification under Heading 84.43.

Ultimately, the Court upheld the decision of the CEGAT, stating that the view taken did not have any infirmity warranting interference. The appeals were dismissed without costs, concluding the legal proceedings on the classification of Actuators under the Central Excise Tariff Act, 1985.