2002 (4) TMI 116 - AT - Central Excise

Summary

Issues involved:
Classification of plastic and rubber products under Central Excise Tariff - Chapters 39 and 40 versus Heading 84.18 as parts of refrigerators.

Analysis:

Issue 1: Classification of products under Central Excise Tariff

The appeals filed by M/s. ILPEA Paramount Pvt. Ltd. revolve around the classification of plastic and rubber products manufactured by them. The key question is whether these items should be classified under their respective Chapters 39 and 40 of the Central Excise Tariff Act, as claimed by the appellants, or under Heading 84.18 as parts of refrigerators, as confirmed by the Commissioner (Appeals) in the impugned Order.

Issue 2: Interpretation of Board's Circular and legal precedents

The learned Advocate representing the appellants argued that the goods in question are not 'parts' but 'accessories' of refrigerators, citing Board's Circular No. 6/86-CX. 4, which clarifies the classification of parts and accessories of refrigerating machinery. Reference was made to legal precedents such as the case of P.R. Packagings Pvt. Ltd. v. CCE, New Delhi II, which emphasized the binding nature of Board Circulars and restricted the Department from challenging their consistency with statutory provisions.

Issue 3: Definition of 'parts' and 'accessories' in the context of refrigerators

The distinction between 'parts' and 'accessories' of refrigerators was highlighted by the Advocate, drawing on the Tribunal's decision in CC v. Jolly Exports (P) Ltd. The argument presented was that while a part of machinery is replaceable, an accessory contributes in a subordinate manner to the overall functioning. Reference was also made to the Explanatory Notes of HSN regarding Rule 3(a) of the Interpretative Rules to support the classification argument based on specificity of description.

Issue 4: Department's contention and counter-arguments

The Departmental Representative contended that the goods in question, being tailor-made for use in refrigerators, should be classified as parts of refrigerators under sub-heading 8418.90 of the Tariff. The argument was based on the suitability of the goods for use solely with refrigerators, as per Note 2(b) to Section XVI of the Tariff.

Judgment and Conclusion

After considering the submissions from both sides, the Tribunal analyzed Board's Circular No. 6/86-CX 4 and legal precedents to determine the classification of the goods. It was observed that the impugned goods did not fall under Annexure "A" of the Circular, which specified parts for treatment involving temperature change. The Tribunal concluded that the goods should be classified under their respective Chapters 39 and 40 of the Central Excise Tariff, as they were not intended for temperature treatment and were not automatically classified under Chapter 84 as parts of refrigerators. Consequently, the appeal was allowed in favor of M/s. ILPEA Paramount Pvt. Ltd.