2007 (7) TMI 125 - AT - Central Excise

Classification The issue arises relating to classification of Capacitor switches and Field switches Held that the Capacitor switches classifiable under Heading 85.35 of CET and Field switches classifiable under Heading 85.37 of CET and extended period not sustained

Summary

Issues:
1. Stay order modification based on BIFR proceedings
2. Classification of 11 KV Pole Mounted SF-6 Gas filled Capacitor Switch
3. Classification of field switch in Excise Appeal No. EDM-162/04
4. Classification of field switch in Excise Appeal No. EDM-163/04

Issue 1: Stay order modification based on BIFR proceedings:
In this case, the appellants were involved in BIFR proceedings for finalization of a Rehabilitation Scheme. The Tribunal noted that the predeposit liability was taken into account in the financial restructuring proposal submitted to the BIFR authorities. Considering this, along with the inclusion of outstanding excise duties in the restructuring proposal and the possibility of disposing of the appeals, the Tribunal modified the earlier stay order. Both parties consented to waive the requirement of pre-deposit, allowing the appeals to proceed without it.

Issue 2: Classification of 11 KV Pole Mounted SF-6 Gas filled Capacitor Switch:
The dispute in Excise Appeal No. EDM-161/04 revolved around the classification of the capacitor switch. The appellants sought classification under Heading 85.35, while the Department classified it under Heading 85.37. The Tribunal analyzed the schematic diagram of the impugned goods and various specifications provided. It was observed that the capacitor switch, despite having auxiliary switches, operated as an integral single machine to connect the electrical supply line to the capacitor bank. The Tribunal disagreed with the lower appellate authority's classification under Heading 85.37, as the capacitor switch was deemed to fall under Heading 85.35. Consequently, the impugned order was set aside, and the appeal was allowed.

Issue 3: Classification of field switch in Excise Appeal No. EDM-162/04:
The appeal concerning the classification of a field switch was dismissed by the Tribunal. The Commissioner (Appeals) had classified the field switch under Heading 85.37, considering it as a combination of switches that controlled electricity for multiple outlets. The Tribunal found no sufficient grounds to interfere with the lower appellate authority's decision, leading to the dismissal of the appeal.

Issue 4: Classification of field switch in Excise Appeal No. EDM-163/04:
In the case of Excise Appeal No. EDM-163/04, the Tribunal allowed the appeal based on the limitation issue. While finding no merit in the appellants' case on the merits of the classification, the Tribunal acknowledged that the impugned show-cause notice was issued beyond the relevant period. As there was no suppression or misstatement by the appellants, the extended time period was deemed inapplicable. Consequently, the impugned order was set aside to the extent challenged, and the appeal was allowed.

In conclusion, the Tribunal addressed various classification issues concerning electrical apparatus and switches, considering technical specifications and functional aspects to determine the appropriate tariff heading. Additionally, decisions were made based on BIFR proceedings and the applicability of time limitations in issuing show-cause notices.