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1996 (10) TMI 74 - SC - Central ExciseWhether the articles manufactured by the respective appellants fall under Tariff Item 52 (Specific Entry) or under Tariff Item 68 (Residuary Item) of Central Excise Tariff? Held that - The Tribunal has misdirected itself while reaching the conclusion. While the Tribunal was prepared to accept the order of the Appellate Collector dated 8-5-1978 as above, we fail to understand why the same principle has not been applied to the facts of this case. If the screws and bolts because of the size and weight could not be brought under Item 52, the same is the case with articles with which we are concerned. As pointed out earlier by the Tribunal by deviating from the correct line of analysis of the issues misdirected itself into various other aspects and ended in wrong judgment. Therefore, we find it difficult to sustain it. Thus the article under consideration did not fall within Item 52 of the Tariff Item and there being no specific Entry, they fall under Tariff Item 68.
Issues Involved:
1. Classification of manufactured articles under Tariff Item 52 or Tariff Item 68 of the Central Excise Tariff. 2. Interpretation of tariff entries based on common parlance versus technical or dictionary meaning. 3. The binding nature of trade notices on the Tribunal and Courts. 4. Evaluation of evidence presented by the appellants and the Revenue. Issue-Wise Detailed Analysis: 1. Classification of Manufactured Articles: In Civil Appeal No. 2800/84, the appellants manufactured four specified articles (Lid screw, Barrel axle screw, Bridge screw, and Dial key screw) during the production of watches. The controversy was whether these items fall under Tariff Item 52 as "bolts, nuts and screws" or under Tariff Item 68 as "all other goods not elsewhere specified." The Assistant Collector classified them under Item 52, but the Collector (Appeals) reclassified them under Item 68. The Tribunal restored the classification under Item 52, leading to the present appeal. In Civil Appeal No. 2307/86, the appellants sought to classify 32 types of connecting rod bolts under Tariff Item 68. The Assistant Collector and the Tribunal classified them under Tariff Item 52, while the Collector (Appeals) had initially classified them under Item 68. 2. Interpretation of Tariff Entries: The appellants argued that tariff entries should be interpreted based on common parlance and trade understanding rather than technical or dictionary meanings. They presented affidavits and trade notices to support their claim that the articles were not commonly understood as screws but as watch components. The Tribunal, however, did not accept this interpretation and relied on the specific entry for screws under Item 52. The Court emphasized that tariff entries must be construed as understood in common parlance, citing previous decisions such as Plasmac Machine Mfg. Co. Pvt. Ltd. v. Collector of Central Excise and Indo International Industries v. Commissioner of Sales Tax, U.P. It concluded that the Tribunal failed to apply this test correctly, particularly in light of the evidence presented by the appellants. 3. Binding Nature of Trade Notices: The appellants relied on trade notices from the Bombay and Punjab Collectorates, which supported their classification under Item 68. The Tribunal dismissed the binding nature of these trade notices, stating that they are not binding on the Tribunal. However, the Court noted that trade notices guide traders and should not be ignored unless withdrawn. The Court found that the Tribunal did not give due consideration to these trade notices. 4. Evaluation of Evidence: The appellants presented affidavits from trade representatives and an engineer's description to show that the articles did not perform the basic function of fastening. The Revenue did not counter this evidence or call the deponents for cross-examination. The Court observed that the Tribunal did not adequately consider this unchallenged evidence. In Civil Appeal No. 2307/86, the Tribunal accepted the classification under Item 52 based on the evidence presented by the Revenue, including technical publications and a note from the Automotive Research Association of India. The Court found no reason to interfere with the Tribunal's findings in this case. Conclusion: For Civil Appeal No. 2800/84, the Court allowed the appeal, set aside the Tribunal's order, and restored the Collector (Appeals)'s order, classifying the articles under Tariff Item 68. The appellants were entitled to a refund with interest if they had paid the duty. For Civil Appeal No. 2307/86, the Court dismissed the appeal, upholding the Tribunal's classification of the connecting rod bolts under Tariff Item 52.
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