1985 (7) TMI 348 - AT - Central Excise

Summary

Issues:
Classification of Lamp Holders under Central Excise Tariff - Applicability of show cause notice timeline.

Classification Issue:
The case involved a dispute regarding the classification of Lamp Holders manufactured by M/s. Simco Industries under the Central Excise Tariff. Initially, the Assistant Collector classified the goods under Tariff Item 61, which was later challenged by the respondents. The Collector of Central Excise (Appeals) set aside the Assistant Collector's order. Subsequently, the Central Government issued a show cause notice under Section 36(2) of the Central Excises and Salt Act to reconsider the classification issue. The respondents objected, citing a time limitation under the third proviso to Section 36(2). However, it was argued that the second proviso applied since the proceedings related solely to classification, not duty demands. The Tribunal overruled the objection, holding that the show cause notice was validly initiated within the prescribed timeline.

Classification Precedents:
The classification issue was previously addressed by the Tribunal in M/s. Bombay Switchgears v. Collector of Central Excise, where Lamp Holders were classified under Tariff Item 61. Additionally, the Punjab and Haryana High Court ruled in M/s. Ajanta Electricals v. Collector of Central Excise that Lamp Holders fall under Tariff Item 61. The respondents contended that the Tribunal's decision contradicted the High Court's judgment, arguing that Lamp Holders did not qualify as "switches, plugs, and sockets" under Tariff Item 61. However, the Tribunal emphasized the practice of following High Court judgments in the absence of contrary decisions, thereby upholding the classification under Tariff Item 61 based on the High Court's ruling.

Judicial Interpretation:
The respondents sought to differentiate the Tribunal's decision and the High Court's judgment, particularly on the interpretation of the term "namely" in Tariff Item 61. They argued that the High Court's interpretation was incorrect, referencing a Tribunal decision in Delta Spokes Manufacturing Company v. Collector of Central Excise. However, the Tribunal maintained that it was bound to follow the High Court's decision, regardless of the reasoning, and affirmed that Lamp Holders are classifiable under Tariff Item 61. Consequently, the appeal was allowed, the Collector (Appeals) order was set aside, and the Assistant Collector's classification decision was reinstated.