2017 (10) TMI 1024 - AT - Central Excise

Classification of goods - Control Panels - Held that - The period involved is February 2002 to October 2006 - The Tribunal in their own case COMMISSIONER OF CUSTOMS, CHENNAI Versus MAK CONTROLS & SYSTEMS (P) LTD. 2006 (12) TMI 332 - CESTAT, CHENNAI , has held that Ground Power Unit is classifiable under 8803 in terms of Note 3 of Section XVII - appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of control panels and corresponding duty demand.

Analysis:
1. The appellants, manufacturers of Ground Power Units, were issued a show cause notice for allegedly manufacturing and clearing Control Panels for captive consumption without paying duty. The department classified the Control Panels under Heading 85.37 and raised a demand, interest, and proposed penalty. The original authority confirmed the classification and imposed a penalty of &8377;50,000 under Central Excise Rules, 2002. Appeals were filed by both the appellant and the department against the decision.

2. The appellant argued that the Control Panels are specifically designed for Ground Power Units and aircraft parts, classifying them under 8803 instead of 8537. They relied on previous decisions in their favor, including one where compressors, intermediate products in Ground Power Unit manufacture, were considered part of aircraft. The Tribunal had previously upheld the classification of Ground Power Units under 8803 in the appellant's case, and the appeal by the department was dismissed by the Supreme Court.

3. The learned AR reiterated the findings in the impugned order, supporting the department's position on classification and duty demand. The issue revolved around the classification of Control Panels and the duty demand for the period between February 2002 and October 2006. The appellant contended that parts of aircraft are exempt under specific notifications, further strengthening their argument for classification under 8803.

4. After hearing both sides, the Tribunal considered the appellant's previous successful cases and the specific design and use of the Control Panels for Ground Power Units and aircraft parts. Relying on precedents and the exemption notifications, the Tribunal found the demand unsustainable and set aside the impugned orders. The appeals were allowed with consequential relief, if any, granted to the appellant.