2000 (11) TMI 225 - AT - Central Excise

Summary

Issues: Classification of goods under Central Excise Tariff Act, 1985; Interpretation of Rule 2(a) of the CETA, 1985; Time-bar for demand of duty.

Classification of Goods:
The appeal involved a dispute regarding the classification of goods under the Central Excise Tariff Act, 1985. The appellants, engaged in manufacturing Chain and Belt Conveyors, classified "Parts of the Belt Conveyor" under Heading No. 84.28, while the Revenue contended that the goods should be classified under Heading No. 84.31. The issue arose from the delivery of "Belt Conveyors in knocked down condition" without the belt, leading to a demand for differential duty.

The Commissioner held that the goods supplied by the appellants did not constitute a complete "Belt Conveyor" and should be classified as parts of a conveyor under Heading 84.31. The appellants argued that the conveyors, even without the belt supplied, retained the essential character of a complete belt conveyor. They relied on Rule 2(a) of the Interpretative Rules of the CETA, 1985, which states that incomplete goods having the essential character of complete goods shall be classified along with the complete goods.

The Tribunal analyzed the purchase orders, drawings, and the nature of the goods supplied. It observed that the customers ordered the entire conveyor system without specifically ordering the belt, which could be procured separately. Referring to Rule 2(a) of the CETA, the Tribunal concluded that the goods supplied were unfinished conveyors with the essential character of finished belt conveyors. Therefore, the goods were classified as complete "Belt Conveyors" under Heading 84.28, overturning the Commissioner's decision.

Interpretation of Rule 2(a) of the CETA, 1985:
The dispute also revolved around the interpretation of Rule 2(a) of the CETA, 1985. The appellants argued that the unfinished conveyors supplied by them retained the essential character of complete belt conveyors, as per Rule 2(a. They contended that non-supply of the belt along with the conveyors did not disqualify them from being classified as "Belt Conveyors." The Tribunal agreed with this interpretation and classified the goods accordingly under Heading 84.28.

Time-bar for Demand of Duty:
The appellants raised the issue of the demand being time-barred, stating that there was no suppression of facts as they regularly submitted returns and bills. However, as the Tribunal ruled in favor of the appellants on the classification issue, it did not delve into the question of limitation.

In conclusion, the Tribunal allowed the appeal, providing consequential relief to the appellants, as it found merit in their argument that the goods should be classified as complete "Belt Conveyors" under Heading 84.28 based on Rule 2(a) of the CETA, 1985.