2011 (8) TMI 756 - AT - Central Excise

Classification - Bearing with Housing and Plain Shaft Bearing (BWH and PSB) -HSN Explanatory Statements - Held That - Bearing Housings and bearing brackets falling under are excluded from the classification under Heading 84.82 and specifically mentioned in Chapter 84.83. Order in Original up-held and Revenue appeal dismissed.

Summary

Issues:
Classification of products BWH and PSB under Central Excise Tariff Act, 1985

Analysis:
The case involves an appeal by the Commissioner of Central Excise against an Order-in-Appeal regarding the classification of products BWH and PSB under Chapter Heading 8482.00 or 8483.90 of the Central Excise Tariff Act, 1985. The respondents, manufacturers of ball bearings, had been claiming SSI exemption until 2001. The dispute arose when the department issued a show-cause notice proposing that BWH and PSB should be classified under 8482.00, thus disallowing the small scale exemption. The Assistant Commissioner upheld this classification, leading to an appeal by the respondents before the Commissioner (Appeals), who ruled in favor of the respondents. The Revenue challenged this decision before the Appellate Tribunal CESTAT, Mumbai.

The Revenue contended that BWH and PSB should be classified under 8482.00, as they are bearings, and the Commissioner (Appeals) erred in relying on the HSN Explanatory Notes. Prior to 2001, the respondents themselves classified the goods under 8482.00. On the other hand, the respondents argued that BWH and PSB are distinct from ball bearings, supported by product descriptions and marketing materials. They asserted that these products are correctly classifiable under Chapter Heading 84.83, as 'Door & Window Accessories,' not as ball bearings. They also cited the HSN Explanatory Notes to support their classification.

After considering the arguments, the Tribunal analyzed the HSN Explanatory Notes under Chapter 84.82 and 84.83. It noted that bearing housings and bearing brackets fall under 84.83, while products incorporating ball or roller bearings and plain shaft bearings are specifically mentioned under 84.83. The Tribunal found no error in the Commissioner (Appeals)'s order-in-appeal, upholding the classification of BWH and PSB under 84.83. Consequently, the Tribunal dismissed the Revenue's appeal and disposed of the Cross Objections.

In conclusion, the Tribunal's decision clarified the correct classification of products BWH and PSB under the Central Excise Tariff Act, 1985, based on the HSN Explanatory Notes. The judgment emphasized the importance of considering product characteristics and descriptions in determining the appropriate classification under the tariff headings.