1979 (10) TMI 79 - CGOVT - Central Excise

Summary

Issues:
Classification of cinema chairs under Central Excise Tariff - Whether liable to excise duty under Item No. 40 - Rejection of revised classification list - Appellate Collector's decision in favor of the party - Revision proceedings by Government of India under Section 36(2) of the Central Excises and Salt Act, 1944 - Validity of the revision proceedings.

Analysis:
The case involved the classification of cinema chairs manufactured by a company under the Central Excise Tariff. Initially, the company paid duty on the chairs as steel furniture under Item No. 40 of the Central Excise Tariff. However, following a decision by the Government of India in another case, the company sought approval for classifying the chairs as non-excisable due to similarities with chairs manufactured by another unit. The Assistant Collector of Central Excise rejected this request, stating that cinema chairs fell under the category of steel furniture and were thus liable for excise duty.

Upon appeal, the Appellate Collector of Central Excise, New Delhi, overturned the Assistant Collector's decision, ruling that the cinema chairs were not considered 'furniture' under Item 40 of the Central Excise Tariff. The Appellate Collector based this decision on the chairs being fixed to the floor and adjacent seats in cinema halls, making them inseparable from the hall itself. Additionally, the chairs were deemed immovable and unsuitable for use outside the hall without further fabrication.

The Government of India, upon reviewing the case records, issued a show cause notice to the company, questioning the Appellate Collector's decision. The company argued that the Government's earlier decision in a similar case bound the lower authorities and that the chairs were more akin to fixtures than movable furniture. They referenced legal judgments and definitions of 'goods' and 'furniture' to support their position.

After considering the company's arguments and the absence of a specific explanation in the tariff entry regarding the movability of furniture, the Government of India concurred with the company's contentions. They acknowledged the dictionary definition of 'furniture' and the necessity for movability to classify an item as furniture. Citing the lack of justification to overturn the Appellate Collector's decision and in light of legal precedents, the Government dropped the review proceedings, thereby upholding the classification of cinema chairs as non-excisable and exempt from excise duty under Item No. 40 of the Central Excise Tariff.