2012 (3) TMI 13 - SC - Central Excise

Classification of add-on cards and motherboards and relevant rate of duty leviable under heading 8473.00 or 8471.00 Held that - This Court on number of occasions has observed that Tribunal is the last fact finding authority on facts. See Standard Radiators Pvt. Ltd. v. CCE (2002 - TMI - 46236 - Supreme Court Of India). In present acse Tribunal merely proceeds to decide the issue on the ground that the assessee had earlier classified the goods in question under Sub-Heading No. 8473.00 and therefore it was not open to him to claim classification under Sub-Heading No.8471.00. In a commodity classification it is essential that the character and uses of the commodity and its parts are considered in detail and examined thoroughly. Therefore we remand the matter to the Tribunal to decide the issue after considering the nature and the functions of add-on cards and motherboards in the functioning of Automatic Data Processing Machines.

Issues:
1. Classification of add-on cards and motherboards for Central Excise Act, 1944.
2. Relevant rate of duty leviable.
3. Confusion regarding the rate of duty for the relevant period.
4. Adjudication of differential duty payment based on classification.
5. Tribunal's decision based on classification by the assessee.
6. Application of Chapter Note 5(a) and 5(b) of Heading 8473.
7. Tribunal's role as the last fact-finding authority.
8. Consideration of character, function, and use of goods for classification.
9. Tribunal's failure to scrutinize the nature and functions of the products.
10. Remand of the matter for fresh consideration by the Tribunal.

Detailed Analysis:
1. The core issue in the first appeal is the classification of add-on cards and motherboards under the Central Excise Act, 1944. The Tribunal concluded that these items fall under Sub-Heading No. 8473.00 of the Central Excise Tariff Act, 1985.

2. The history of the rate of duty on add-on cards and motherboards before and after 1989 is crucial. The rate of duty for goods under Sub-Heading No. 8471.00 and 8473.00 varied over time, leading to a dispute over the applicable rate.

3. There is a discrepancy regarding the rate of duty for the relevant period, with the assessee claiming 15% and the revenue asserting 25%. This confusion does not impact the primary issue under consideration.

4. The Adjudicating Authority issued show cause notices directing the assessee to pay differential duty based on the classification of goods. The appellant contended that the goods should be classified under Sub-Heading No. 8471.00, not 8473.00, to avoid the additional duty payment.

5. The Tribunal's decision was based on the classification chosen by the assessee and the application of Chapter Note 5(a) and 5(b) of Heading 8473 to support the classification.

6. The Supreme Court emphasized the Tribunal's role as the final fact-finding authority and the need for a detailed examination of facts before reaching a conclusion, citing relevant case law.

7. It is essential to consider the character, function, and use of goods for proper classification under the Central Excise Act, as highlighted in previous judgments.

8. The Tribunal failed to scrutinize the nature and functions of add-on cards and motherboards adequately, leading to the decision to remand the matter for fresh consideration.

9. Consequently, the Supreme Court allowed the appeal, set aside the Tribunal's order, and remanded the case for a thorough reevaluation, emphasizing the importance of understanding the products' functions in the context of Automatic Data Processing Machines.

10. The second appeal involved a similar issue of classification of motherboards, with the Court overturning the Tribunal's decision and remanding the matter for a fresh disposal after considering the nature and functions of the products in question.

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