2008 (4) TMI 110 - AT - Central Excise

Commissioner (Appeals) decided that spur gear and pinion wheel are classifiable under CSH 8414.99 - Section note 2 of Section XVI - impugned goods which figure in chapter heading 84..83 have to be necessarily classified under heading 84.83 in view of the above Section note even though they are parts designed for exclusive use in machines falling under Chapter 84 - appeal of the revenue against decision of commissioner is allowed

Summary

Issues: Classification of 'spur gear' and 'pinion wheel' under the Central Excise Tariff Act, 1985.

In this judgment by the Appellate Tribunal CESTAT, CHENNAI, the issue revolved around the classification of 'spur gear' and 'pinion wheel' manufactured by M/s. Sundaram Fastners under the Central Excise Tariff Act, 1985. The Commissioner (Appeals) had classified the goods under CSH 8414.99, considering them as parts of electric fans. However, the Revenue appealed this decision, arguing that the items should be classified under chapter heading 84.83 instead of 8414.99. The ld. SDR representing the Revenue referred to Note 2(a) of Section XVI of the tariff, stating that parts included in any of the headings of Chapter 84 or Chapter 85 should be classified in their respective headings. The ld. SDR contended that 'spur gear' is a gear and 'pinion wheel' is a flywheel falling under chapter heading 84.83, hence should be classified accordingly. Moreover, the ld. SDR cited HSN explanatory notes emphasizing that parts designed for specific machines should be classified under their appropriate headings, even if specially made. The respondent, on the other hand, relied on previous judgments to support their classification argument.

The Tribunal analyzed the case records and submissions from both sides. It was noted that the impugned items, 'spur gear' and 'pinion wheel,' were indeed covered under heading 84.83 of the tariff. Referring to Section note 2 of Section XVI of the Central Excise Tariff, the Tribunal highlighted that parts falling under Chapter 84 or Chapter 85 should be classified in their respective headings. Following interpretative rules, the Tribunal emphasized that goods must be classified based on the terms of the heading and relevant notes. Despite being parts exclusively for machines in Chapter 84, the impugned goods had to be classified under heading 84.83 as per the statutory provisions. The Tribunal distinguished previous decisions, noting that a remand was made in one case to ensure proper classification examination. The Tribunal found the judgment in another case to be inconsistent with Section note 2 of Section XVI, asserting that they were not bound by that decision. Consequently, the appeal of the Revenue was allowed, overturning the classification made by the Commissioner (Appeals).

This judgment provides a detailed analysis of the classification rules under the Central Excise Tariff Act, emphasizing the importance of statutory provisions and interpretative rules in determining the classification of goods. The Tribunal's decision underscores the need to adhere to the specific headings and notes while classifying items, even if they are designed for particular machines.