1987 (9) TMI 202 - AT - Central Excise

Issues Involved:
1. Classification of "self-starter" under the Central Excise Tariff.
2. Validity of the Appellate Collector's order.
3. Applicability of Supreme Court and High Court judgments.
4. Trade and technical understanding of "self-starter" versus "electric motor."
5. Burden of proof for classification under Item 30.

Issue-wise Detailed Analysis:

1. Classification of "self-starter" under the Central Excise Tariff:

The central issue was whether the "self-starter" should be classified under Item 30 (electric motor) or Item 68 (goods not elsewhere specified) of the Central Excise Tariff. The department assessed the self-starter under Item 30, arguing it was an electric motor, while the manufacturers contended it should fall under Item 68, as Item 34A (parts of motor vehicle) did not include such motors.

2. Validity of the Appellate Collector's order:

The manufacturers presented five propositions challenging the Appellate Collector's order:
- It ignored the trade understanding that a "self-starter" is not an electric motor.
- It was based on personal observations, which should not form the basis of classification.
- It disregarded ISI specifications, which differentiate "self-starter" from "electric motor."
- It failed to recognize that specific entries (Item 34A read with Item 68) should prevail over general entries (Item 30).
- The department did not discharge the burden of proving that the "self-starter" falls under Item 30.

3. Applicability of Supreme Court and High Court judgments:

The manufacturers cited the Supreme Court judgment in Atul Glass Industries and the Bombay High Court judgment in Sahney Steel & Pressworks. The Supreme Court had ruled that a glass mirror was not glassware under Item 23A but should be classified under Item 68 due to its distinct identity and function. The manufacturers argued that similarly, the "self-starter" should not be classified as an electric motor under Item 30 but under Item 68.

4. Trade and technical understanding of "self-starter" versus "electric motor":

The manufacturers argued that trade and technical parlance did not consider a "self-starter" to be an electric motor. They provided affidavits from traders to support this claim. However, the department countered that the affidavits actually indicated that the trade understood the "self-starter" as a type of electric motor, albeit different from other electric motors.

5. Burden of proof for classification under Item 30:

The manufacturers contended that the department had not provided sufficient evidence to classify the "self-starter" under Item 30. They argued that the ISI specifications and the functional differences between a "self-starter" and a regular electric motor supported their claim.

Conclusion:

The judgment concluded that the "self-starter" is indeed an electric motor and should be classified under Item 30. The court reasoned that:

- The "self-starter" operates on the same principles as an electric motor, with components such as field windings, armature, rotors, and stators.
- The ISI specifications describe the "self-starter" as a special DC electric motor.
- The trade and technical parlance, as well as engineering texts, recognize the "self-starter" as a type of electric motor.
- The Supreme Court's ruling in Atul Glass Industries was distinguished on the basis that the "self-starter" had not undergone a transformation that would necessitate its classification under Item 68.
- The HSN tariffs and CCCN support the classification of "self-starter" under electric motors.

The court affirmed the department's assessment of the "self-starter" under Item 30, rejecting the manufacturers' appeal for classification under Item 68.

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