2000 (2) TMI 141 - AT - Central Excise

Summary

Issues: Classification of spares and accessories for power driven pumps under CET Heading 84.13

Analysis:
1. The appellants classified spares and accessories for power driven pumps under Heading 84.13 chargeable to duty at 5% in their classification lists. However, the Department issued show cause notices for modification of classification lists based on Rule 3A of the Rules for Interpretation of the Tariff and Note 2(a) of Section XVI. The Assistant Collector classified the items under different headings and confirmed duty demands.

2. The lower Appellate Authority upheld the Adjudicating authority's order, leading to appeals by the appellants. Despite the absence of the appellants during the hearing, the learned DR presented arguments, and the Tribunal examined the records to understand the issue in dispute.

3. The Tribunal referred to Note 2 to Section XVI of the Schedule to the CETA 1985, emphasizing that parts of machines included in any other heading of Chapter 84 should be classified in their respective headings. Parts like valves, bearings, crank shaft, etc., covered by specific headings, are required to be classified accordingly, even if they are suitable for use with power driven pumps.

4. Upholding the classification by the lower authorities, the Tribunal rejected the contention that the disputed items should be classified under Heading 84.13 as parts of power driven pumps. It distinguished a previous case where goods were classified based on end-use, clarifying that in this case, classification is based on specific sub-headings of Chapter 84.

5. The Tribunal dismissed the appellants' argument that some parts were purchased from manufacturers or the open market, emphasizing that the goods in dispute are classifiable under various sub-headings of Chapter 84. It also addressed the enforcement of duty demands, remanding the issue to the Assistant Commissioner for a fresh decision in light of a Supreme Court judgment.

6. The Tribunal highlighted the importance of clearances made in accordance with approved classification lists, citing the Supreme Court decision to support the argument that demands cannot be enforced if goods were cleared based on approved lists. The issue of enforceability of demands was remanded for further examination, with a directive to confirm demands on clearances made otherwise.