1999 (12) TMI 64 - SC - Central Excise

Summary

Issues: Classification of radiators under excise tariff; Quashing of demand in show cause notice; Correctness of new classification under Tariff Entry 84.09; Acceptance of radiator assemblies as parts of internal combustion engines; Modvat benefit claim.

Classification of Radiators under Excise Tariff: The appellants, manufacturers of radiators, faced a demand based on reclassification under Tariff Entry 84.09 instead of 84.79. The issue arose regarding the correct classification of radiator assemblies as either accessories or parts suitable for use with internal combustion engines. The Tribunal was directed to reconsider the case with a detailed examination and categoric findings, allowing both sides to present further evidence.

Quashing of Demand in Show Cause Notice: The demand in the show cause notice dated July 16, 1992, was challenged, citing a Constitution Bench judgment that upheld the correctness of excise duty levy until challenged. The demand in subsequent notices for different periods was upheld, except for the initial demand, which was quashed due to the approved classification list.

Correctness of New Classification under Tariff Entry 84.09: The reclassification of radiator assemblies under Tariff Entry 84.09 was contested by the appellants, arguing that radiators were accessories, not parts of internal combustion engines. The court rejected this argument, stating that a cooling device like a radiator is essential for engine function and thus constitutes a part of the engine. Consequently, the civil appeals were dismissed, except for the demand from the initial show cause notice, which was quashed.

Acceptance of Radiator Assemblies as Parts of Internal Combustion Engines: The argument that radiator assemblies are accessories, not parts of internal combustion engines, was refuted. The court emphasized the essential role of a cooling device in engine operation, leading to the conclusion that a radiator constitutes a part of the engine. Any deposits made by the appellants in response to the quashed demand would be adjusted against the remaining demands.

Modvat Benefit Claim: The judgment addressed the appellants' potential claim for Modvat benefit for themselves or their customers, specifying that such claims would be decided in accordance with the law. The judgment concluded with no order as to costs, ensuring a fair and expedited resolution of the case.