2001 (3) TMI 131 - AT - Central Excise

Summary

Issues Involved:
1. Classification of Uninterrupted Power Supply System (UPSS) under the Central Excise Tariff Act.
2. Applicability of Harmonized System of Nomenclature (HSN) for classification.
3. Validity of previous Tribunal decisions and Board circulars on UPSS classification.

Summary:

1. Classification of UPSS:
The appellants, engaged in manufacturing UPSS, classified their product under Chapter Heading 85.04 of the Central Excise Tariff Act, 1985, attracting a 10% ad valorem duty. The Department issued show cause notices demanding differential duty by reclassifying UPSS under sub-heading 8543. The adjudicating authority and the Appellate Commissioner upheld this reclassification, relying on previous Tribunal decisions.

2. Applicability of HSN:
The Tribunal emphasized that the Central Excise Tariff is based on the HSN. According to the Apex Court, any dispute regarding tariff classification must be resolved with reference to HSN unless the Central Excise Tariff Act indicates otherwise. The HSN describes static converters as devices converting electrical energy for further use, including rectifiers and inverters, which aligns with the function of UPSS.

3. Validity of Previous Tribunal Decisions and Board Circulars:
The Tribunal reviewed previous decisions, including J.K. Synthetics v. Collector of Customs and Tata Libert Ltd. v. CCE, which classified UPSS under 8543. However, the Tribunal found these decisions erroneous, noting that they did not consider the actual functioning of UPSS and the Board's Circular No. 40/90, which classified UPSS under 8504. The Tribunal concluded that the presence of a battery in UPSS does not alter its classification as a static converter.

Conclusion:
The Tribunal held that UPSS should be classified under sub-heading 8504, as it functions primarily as a static converter. The orders impugned in the appeal were set aside, and the amount deposited by the appellant was ordered to be returned without delay. The appeal was allowed in these terms.