2017 (10) TMI 339 - AT - Central Excise

Classification of goods - rough castings (Plummer Blocks Housing for Bearing) - whether classifiable under Chapter 84.83 of Central Excise Tariff or to be considered as castings under Chapter Heading 73? - Held that - the castings cleared by the appellants, where the appellant has done various processes including proofing, machining, does not acquire the exact dimensions/specifications to fit into the machines of their customers and therefore, cannot be called as parts of the machines and cannot therefore, be classified under Chapter 84 of CETA - CBEC in its Circular No.225/59/96/CX. Dated 1.7.96 issued on the subject of classification of iron and steel castings refers to the decision of the Tribunal in the case of Shivaji Works Ltd. 1993 (5) TMI 98 - CEGAT, NEW DELHI and states that the castings coming out of casting moulds up to the stage of proof machining and requiring further machining before being used as machine parts would be classifiable under chapter 73 - appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of goods under Central Excise Tariff - Chapter 73 vs. Chapter 84

Detailed Analysis:

Issue 1: Classification of Goods
The appellant, a manufacturer, appealed against an Order-in-Appeal classifying rough castings (Plummer Blocks Housing for Bearing) under Chapter 84.83 of the Central Excise Tariff instead of Chapter 73. The appellant argued that the castings they sell are classified under Chapter 73 and not as parts of machinery under Chapter 84. The appellant undertakes various surface cleaning operations on duty-paid rough castings before selling them. The Tribunal noted that the castings, after the processes done by the appellant, do not meet the exact specifications to be considered parts of machinery under Chapter 84. Citing a previous case, the Tribunal highlighted that incomplete or unfinished goods must have the essential character of the complete goods to be classified similarly. The Tribunal referred to a CBEC Circular supporting the classification of castings up to the proof machining stage under Chapter 73. The Tribunal set aside the impugned order, allowing the appeals based on the above analysis and the Board's Circular.

Conclusion:
The Tribunal ruled in favor of the appellant, classifying the goods under Chapter 73 of the Central Excise Tariff instead of Chapter 84. The decision was based on the analysis that the castings, after the appellant's processes, did not meet the specifications to be considered parts of machinery under Chapter 84. The Tribunal's decision was supported by a previous case and a CBEC Circular, leading to the setting aside of the impugned order and allowing the appeals with consequential relief, if any.