2012 (11) TMI 1070 - AT - Central Excise

Classification of goods - Classification under Chapter sub-heading 7508.00 or under Chapter sub-heading 8607.00 - goods in question are manufactured and supplied to railway authorities and is used as parts of railway locomotive - Held that - Southern Railway has placed the order for supply of valve seat insert as per the drawings and specifications supplied by the railways and the same are to be used as parts of locomotive. The parts of locomotive are specifically covered under Chapter Heading 8607.00 of the Central Excise Tariff. - The appellant had not produced any evidence to show that the goods in question are not used as parts of locomotives. The appellant in the classification list was describing the goods as castings of nickel and nickel based alloys without disclosing the fact that the same are to be supplied to the railway on the specification given by the railways - Decided against assessee.

Issues: Classification of goods under Central Excise Tariff - Chapter 75 vs. Chapter 86

In this case, the appellant, engaged in the manufacture of a product declared as nickel base castings, appealed against an order reclassifying the product under Chapter sub-heading 8607.00 of the Central Excise Tariff. The appellant contended that the goods should be classified under Chapter 75 as castings and not as parts of a railway locomotive under Chapter 86. The Revenue argued that the goods, described as "valve seat insert," were tailor-made for use as parts of locomotives, supported by a purchase order from the Southern Railway. The Tribunal noted that the goods were to be used as parts of locomotives, falling under Chapter Heading 8607.00, which covers parts of railway locomotives or rolling-stock. As the appellant failed to prove that the goods were not used as locomotive parts and did not disclose their specific use in the classification list, the Tribunal upheld the reclassification under Chapter 86, dismissing the appeal.

The main issue in this case revolves around the correct classification of the goods manufactured by the appellant under the Central Excise Tariff. The appellant argued for classification under Chapter 75 as castings, while the Revenue contended for classification under Chapter 86 as parts of a railway locomotive. The Tribunal analyzed the nature of the goods, considering the specific use as parts of locomotives, as evidenced by the purchase order and correspondence with the railways. The Tribunal referred to Chapter Heading 8607.00, which explicitly covers parts of railway or tramway locomotives or rolling-stock, supporting the Revenue's classification.

Another crucial aspect of the case was the appellant's failure to provide evidence to counter the Revenue's claims regarding the specific use of the goods as parts of locomotives. The Tribunal highlighted that the appellant described the goods as castings without disclosing their intended use as per the railway's specifications. This lack of evidence regarding the non-usage of the goods as locomotive parts, coupled with the specific order and manufacturing details provided by the railways, strengthened the Revenue's argument for classification under Chapter 86.

Ultimately, the Tribunal found no merit in the appellant's contentions and upheld the reclassification under Chapter 86 of the Central Excise Tariff. The dismissal of the appeal was based on the Tribunal's determination that the goods in question were tailor-made for use as parts of locomotives, falling within the ambit of Chapter Heading 8607.00. The decision underscores the importance of providing accurate information and evidence regarding the nature and intended use of goods for correct classification under the Central Excise Tariff.

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