2009 (6) TMI 919 - AT - Central Excise

Summary

Issues: Classification of control panels and capacitor boxes for single phase submersible pump sets.

Issue 1: Classification of Control Panels
The judgment revolves around the classification of control panels for single phase submersible pump sets. The Commissioner analyzed the interpretative rules governing the classification of goods and Section Notes and Chapter Notes governing the classification of parts of machines. It was noted that control panels, being equipped with apparatus for electric control, were classified under Chapter Heading 85.37. The Commissioner found that control panels were sold separately in the market with relay settings suitable for any single phase submersible pump set, indicating their classification as a separate product. However, when a submersible pump set was cleared with a control panel as a single unit, both bearing the same serial number, they were considered a pump set and charged the appropriate duty under Tariff Heading 84.13. The judgment emphasized that control panels are integral parts of submersible pump sets and should be classified accordingly when cleared together.

Issue 2: Case Law Analysis
The Commissioner relied on various case laws to support the classification of control panels under Heading 85.37. However, the Tribunal found that the cited case laws were not directly applicable to the current case. The judgment discussed cases where the classification of control panels was disputed based on their usage and clearance with specific machines. It was highlighted that the control panel's classification depended on whether it was cleared separately as a spare part or as part of a machine set. The judgment analyzed each case law's relevance to the present situation and concluded that the control panel's classification should align with the submersible pump set when cleared together.

Issue 3: CBEC Circular Clarification
The judgment addressed the rejection of a clarification issued by the CBEC regarding the classification of remote control apparatus for TV sets. The CBEC circular stated that remote control apparatus for TV sets would be classified under Tariff Heading 85.25 when cleared along with TV sets. The Tribunal found that this clarification supported the appellants' claim, indicating that control panels essential for operating single phase submersible pump sets should be classified under the heading appropriate to pump sets. The judgment emphasized that control panels cleared with pump sets should be assessed under the pump sets' heading based on their combined value, leading to a waiver of pre-deposit and stay recovery pending the appeal's decision.

In conclusion, the judgment focused on the proper classification of control panels and capacitor boxes for single phase submersible pump sets, emphasizing the integral relationship between control panels and pump sets when cleared together. The analysis involved interpretative rules, case law comparisons, and CBEC circular clarifications to determine the appropriate classification and duty liability for these components.