2006 (3) TMI 147 - SC - Central Excise

Whether the appeals filed by the Revenue are required to be rejected upholding the order of the Tribunal and that of the Collector (Excise) to the effect that torch switches manufactured by the respondents are classifiable under Tariff Item 68 of the Schedule to the erstwhile Central Excise Tariff and not under Tariff 61 as contended by the Revenue? Held that - In view of the fact that the department did not lead any evidence to rebut the evidence led by the respondents in our view the switches used in a torch would fall under the residuary entry under Tariff Item 68 and not under Tariff Item 61. Accordingly these Appeals are dismissed leaving the parties to bear their own costs.

Summary

Issues:
Classification of torch switches under Central Excise Tariff - Tariff Item 68 vs. Tariff Item 61.

Detailed Analysis:

Issue 1: Classification of torch switches under Central Excise Tariff
The main issue in the present appeals was whether torch switches manufactured by the respondents should be classified under Tariff Item 68 or Tariff Item 61 of the Central Excise Tariff. The department contended that torch switches fell under Tariff Item 61, which covered Electric Lighting Fittings, while the respondents argued that they should be classified under Tariff Item 68. The Collector of Central Excise held that torch switches were not electric lighting fittings and should be classified as parts of a torch under Tariff Item 68, not under Tariff Item 61.

Issue 2: Tribunal's Decision
The appeals were filed by the department before the Custom, Excise & Gold (Control) Appellate Tribunal, New Delhi, challenging the decision of the Collector. The Tribunal, after initially having a difference of opinion among its members, upheld the view taken by the Collector that torch switches should be classified under Tariff Item 68. The Third Member of the Tribunal supported the Collector's decision, resulting in a majority decision of 2:1 to dismiss the appeals.

Issue 3: Evidence and Affidavits
The respondents presented affidavits from individuals engaged in marketing electric lighting fittings, stating that the items manufactured by the respondents were sold in the market as part of a torch and not as electric lighting fittings. In contrast, the department failed to produce any evidence to support its classification under Tariff Item 61.

Issue 4: Legal Precedent
The Supreme Court referred to a previous case, Union of India v. J.M.A. Industries, where it was held that switches used in motor vehicles did not fall under Tariff Item 61 of the Central Excise Tariff. The Court emphasized the common parlance test in determining the classification of goods, stating that switches and dippers manufactured for exclusive use in motor vehicles were not considered electric lighting fittings under Tariff Item 61.

Conclusion:
Based on the legal precedent, lack of evidence from the department, and the common parlance test, the Supreme Court dismissed the appeals, affirming that torch switches should be classified under the residuary entry of Tariff Item 68 and not under Tariff Item 61. The decision left the parties to bear their own costs, concluding the classification dispute over torch switches under the Central Excise Tariff.