2019 (11) TMI 118 - AT - Central Excise

Classification of goods - Rubber buffer spring Freight Stock - Rubber recoil spring - Rubber draft gear pads - Elastomeric pads - Side bearer pads - Meter gauge pads - whether classifiable under chapter 40 sub-heading No.4016.19 of schedule to Central Excise Tariff Act, 1985? HELD THAT - The learned Original Authority has held classification of all the 28 items manufactured by appellant to be under chapter heading No.4016 on the strength of the said Final Order in ARYAN EXPORTERS PRIVATE LTD. VERSUS COLLECTOR OF C. EX., ALLAHABAD 1999 (8) TMI 197 - CEGAT, NEW DELHI . During the relevant period of the present demand only 2 items out of them such as Rubber Buffer Spring For Freight Stock and Side Buffer Recoils Spring were manufactured by the appellant. We, therefore, hold that since the issue has attained finality Rubber Buffer Spring For Freight Stock and Side Buffer Recoils Spring shall be assessed in accordance with the rate of duty prevailing during the relevant time by classifying the said 2 items under chapter heading No.4016. We hold that remaining 26 types of items which were not manufactured till 1992 cannot be considered to be those on which this Tribunal had passed said order dated 10.08.1999. Since said 26 types of goods were not subject matter of dispute, we are free to decide classification of remaining 26 types of items as list above. In so far as the classification of said 26 items manufactured by appellant are concerned since all of them are supplied to Railway the description under heading No. 8607 is more appropriate for them as compared to description under chapter heading No.4016. Further, as per Rule 3(a) and 3(c) of Rules for Interpretation the classification under heading No.8607 is appropriate. Thus, appeal is rejected in respect of Rubber Buffer Spring For Freight Stock and Side Buffer Recoils Spring and Appeal is allowed in respect of rest 26 types of goods - appeal allowed in part.

Summary

Issues:
Classification of goods under Central Excise Tariff Act, 1985 - Applicability of chapter sub-heading No.4016 and No.8607 - Refund of differential duty - Interpretation of Tariff rules - Finality of previous Tribunal order.

Analysis:

1. Classification of Goods under Central Excise Tariff Act:
The case involves the classification of goods manufactured by the appellant under the Central Excise Tariff Act, 1985. The dispute arose when the appellant continued to classify 26 types of goods under chapter sub-heading No.4016 and paid duty at 12.5% ad valorem, despite a notification reducing the duty rate to 6% ad valorem for goods under chapter heading No.8607. The appellant claimed refund for the differential duty paid.

2. Applicability of Chapter Sub-heading No.4016 and No.8607:
The appellant argued that the 26 goods manufactured were parts supplied to Indian Railways and should be classified under chapter heading No.8607, specific to parts of Railway or Tramway Locomotives. The appellant cited Tariff rules to support this classification, emphasizing the specificity of description under chapter heading No.8607 compared to the more general description under chapter sub-heading No.4016.

3. Refund of Differential Duty:
The dispute also involved the refund of the differential duty paid by the appellant for the period when the duty rates differed between chapter sub-headings No.4016 and No.8607. The Original Authority rejected the refund claim, but the Commissioner (Appeals) allowed it, leading to a demand notice issued by the Revenue for around ?2.38 crore. The Tribunal examined the classification of goods to determine the applicability of the differential duty refund.

4. Interpretation of Tariff Rules:
The Tribunal considered the General Rules for the Interpretation of the Tariff to decide the appropriate classification of the goods in question. Rule 3(a) and 3(c) were particularly relevant in determining the classification under the most specific description and the heading occurring last in numerical order. The Tribunal analyzed previous Tribunal orders and the specific nature of the goods supplied to Indian Railways to support its classification decision.

5. Finality of Previous Tribunal Order:
The Tribunal clarified that the Final Order dated 10.08.1999 pertained only to two specific goods, Rubber Buffer Spring For Freight Stock and Side Buffer Recoil Spring, while the remaining 26 goods were not part of the previous dispute. Therefore, the Tribunal held that the classification of the 26 additional goods under chapter heading No.8607 was appropriate, setting aside the demand for differential duty, interest, and penalty for these goods.

In conclusion, the Tribunal rejected the appeal regarding the classification of Rubber Buffer Spring For Freight Stock and Side Buffer Recoil Spring under chapter sub-heading No.4016 but allowed the appeal for the remaining 26 types of goods, classifying them under chapter heading No.8607. The decision was based on the specificity of the goods supplied to Indian Railways and the interpretation of Tariff rules, emphasizing the distinct nature of the goods in question.