1984 (6) TMI 150 - AT - Central Excise

Issues Involved:
1. Classification of four specified articles (barrel axle screw, bridge screw, dial key screw, and lid screw) under the Central Excise Tariff Schedule.
2. Determination of whether the articles fall under Item 52 as "bolts, nuts, and screws" or under Item 68 as "All other goods, not elsewhere specified."
3. Consideration of the end-use of the articles in their classification.
4. Examination of the applicability of exemption notifications for small-scale units.

Detailed Analysis:

1. Classification of Articles:
The primary issue is whether the four specified articles manufactured by the respondents-referred to as barrel axle screw, bridge screw, dial key screw, and lid screw-are classifiable under Item 52 of the Central Excise Tariff Schedule as "bolts, nuts, and screws" or under Item 68 as "All other goods, not elsewhere specified."

The Assistant Collector classified the articles under Item 52, while the Collector (Appeals) classified them under Item 68. The Tribunal reviewed the physical characteristics and trade nomenclature of the articles. The appellant's representative, Shri K.D. Tayal, argued that the articles were screws within the meaning of the Central Excise Tariff Item and were known in the trade as screws. He cited the Supreme Court decision in Indo International Industries v. Commissioner of Sales Tax, UP, emphasizing the importance of popular and commercial parlance in interpreting commodity schedules.

2. End-Use Consideration:
The respondents' representative, Shri S.N. Mathur, contended that the articles should be classified based on their function and end-use, which was specific to watches. He argued that the articles did not perform the basic function of fastening and should be considered as "parts for wrist watches" under Item 68. Shri Mathur cited Indian Standards Specification and a Madras High Court decision to support his argument.

However, the Tribunal noted that Item 52 does not specify any end-use, and the Supreme Court in Dunlop India Ltd. v. Union of India held that where a Tariff entry does not reference the use or adaptation of the article, the end-use is not relevant. The Tribunal emphasized that the articles should be classified based on their description and not their end-use.

3. Examination of Functions:
The Tribunal examined the detailed descriptions and functions of each of the four articles provided by the respondents' engineer, Shri Harpreet Singh. The Tribunal observed that all the articles had the function of holding together two or more parts of the watch assembly, despite the respondents' arguments about minute separations and the role of the screw heads.

The Tribunal concluded that the articles had the appearance of screws, were described as screws by the manufacturers and the Indian Standards Institution, and performed the function of holding parts together. Therefore, they should be classified under Item 52.

4. Applicability of Exemption Notifications:
Shri Tayal pointed out that if the goods were classified under Item 52, the respondents might claim the benefit of exemption from duty for small-scale units under Notification No. 71/78-CE or No. 80/80-CE. However, the Assistant Collector had already examined this issue and found that the respondents were not entitled to the exemption. The Tribunal did not find any need to remand the matter for a fresh decision on this point.

Conclusion:
The Tribunal allowed the appeal, set aside the order of the Collector (Appeals), and confirmed the order of the Assistant Collector, classifying the articles under Item 52 of the Central Excise Tariff Schedule. The Tribunal emphasized the importance of classifying goods based on their description and trade nomenclature rather than their end-use, in line with established legal principles.

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