1986 (5) TMI 176 - AT - Central Excise

Summary

Issues Involved:
1. Classification of stapling machines under the Customs Tariff Act (CTA).
2. Levy of countervailing (cv) duty under Central Excise Tariff (CET).

Detailed Analysis:

1. Classification of Stapling Machines under the Customs Tariff Act (CTA):

Background:
The appeal was filed against the order of the Collector of Customs (Appeals), Madras, who classified the stapling machines under heading 84.55 CTA, contrary to the Assistant Collector's classification under heading 84.51/55. The respondents initially argued for classification under 84.52 read with Item 68 CET for cv duty purposes but later requested alternate assessments under 84.52, 84.55, or 84.45/48.

Department's Argument:
The department's representative, Shri J. Gopinath, contended that the Collector (Appeals) erred in facts and law by misclassifying the staplers as non-office type, intended for wood and cardboard box making. He emphasized that the staplers, catalogued as office equipment, perform stapling, pinning, and tacking functions and use Max-3 stapling pins, typically for office use. He argued that the primary function of the machines is stapling, and their classification should be under 84.51/55 as office machines, citing the CCCN Explanatory Notes and the Dunlop India case for precedence of specific entries.

Respondents' Argument:
The respondents' advocate, Shri Subramaniam, argued that entry 84.54/55(1) is residuary and should cover staplers exclusively for office use. He claimed the imported machines are not used in offices but for various processes, including cardboard and wood stapling. He referenced the Indian Standard Specification for Staplers and the Collector (Appeals)'s observation that the machines' size and nature of pins indicate non-office use.

Tribunal's Observations:
The tribunal noted that the Collector (Appeals) did not sufficiently justify the exclusion of the machines from office use based on their size and pin type. The catalogues and literature indicated the machines' primary function as stapling large volumes of paper, with tacking and pinning as secondary functions. The tribunal highlighted that the machines are described as office equipment in the catalogues and that the pins used are typical for office staplers.

Conclusion:
The tribunal concluded that the stapling machines are primarily for office use and should be classified under heading 84.51/55 CTA. The Collector (Appeals)'s order was set aside, and the department's appeal was allowed.

2. Levy of Countervailing (cv) Duty under Central Excise Tariff (CET):

Background:
The respondents argued for cv duty assessment under Item 68 CET, while the Assistant Collector assessed it under Item 33D CET. The Collector (Appeals) did not address the cv duty issue.

Tribunal's Observations:
The tribunal emphasized that cv duty should be decided based on the Central Excise Tariff. Given the classification of the stapling machines under 84.51/55 CTA, the tribunal upheld the Assistant Collector's assessment under Item 33D CET.

Conclusion:
The tribunal affirmed the levy of cv duty under Item 33D CET, as maintained by the Assistant Collector.

Final Judgment:
The tribunal set aside the Collector (Appeals)'s order, allowed the department's appeal, and upheld the levy of cv duty under Item 33D CET.