1983 (2) TMI 307 - AT - Central Excise

Summary

Issues Involved:
1. Classification of "Jockey Pulleys" under Central Excise Tariff.
2. Applicability of Trade Notices and Tariff Advices.
3. Consideration of evidence and ISI definitions.
4. Justification for changing the classification of Jockey Pulleys.
5. Refund of excess duty paid.

Issue-wise Detailed Analysis:

1. Classification of "Jockey Pulleys" under Central Excise Tariff:
The primary issue revolves around whether Jockey Pulleys should be classified under Tariff Item No. 49 (Rolling Bearings) or Tariff Item No. 68. Initially, the Assistant Collector classified the goods under Item No. 68, but the Collector later reclassified them under Item No. 49, leading to a dispute. The Tribunal noted that Jockey Pulleys are not known in the trade as bearings and are essentially an assembly of several components, including bearing parts, but not a complete bearing unit. Therefore, the Tribunal concluded that Jockey Pulleys should be classified under Item No. 68.

2. Applicability of Trade Notices and Tariff Advices:
The appellants argued that Trade Notice No. 118/75 and Tariff Advice No. 14/81 did not apply to Jockey Pulleys. The Tribunal found that these notices and advices did not specifically classify Jockey Pulleys but addressed top rollers and centering sleeve inserts. The Tribunal emphasized that Jockey Pulleys do not have extended shafts, distinguishing them from the items mentioned in the notices. Thus, the Collector's reliance on these notices for reclassification was deemed unjustified.

3. Consideration of evidence and ISI definitions:
The appellants provided substantial evidence, including purchase orders, sales invoices, and affidavits, to prove that Jockey Pulleys are not known as bearings in the trade. The Tribunal observed that the Collector ignored this evidence and relied on ISI definitions, which were not referenced in the Show Cause Notice. The Tribunal held that ISI definitions were not strictly justifiable for determining the classification and that the evidence provided by the appellants should have been considered.

4. Justification for changing the classification of Jockey Pulleys:
The Tribunal referred to previous decisions and emphasized that any change in classification should be based on fresh facts, a change in law, or a modification in the process of manufacture. In this case, there were no new facts, changes in the law, or modifications in the manufacturing process. The Tribunal cited the decision in J.K. Synthetics Ltd. v. Union of India, which stated that the department should not change its stand without cogent reasons. Therefore, the Collector was not justified in reclassifying Jockey Pulleys under Item No. 49.

5. Refund of excess duty paid:
As a result of the Tribunal's decision to classify Jockey Pulleys under Item No. 68, the appellants were entitled to a refund of the excess duty paid. The Tribunal ordered the Department to make necessary adjustments or refunds within two months of the communication of the order.

Conclusion:
The appeal was allowed, the order passed by the Collector was set aside, and the order of the Assistant Collector was restored. Jockey Pulleys were to be classified under Item No. 68, and the Department was directed to refund the excess duty paid by the appellants.