1987 (12) TMI 273 - AT - Central Excise

Summary

Issues: Classification of tool bits under the Central Excises and Salt Act, 1944

Analysis:
The judgment by the Appellate Tribunal CEGAT, New Delhi involved the classification of tool bits under the Central Excises and Salt Act, 1944. The main issue was whether tool bits, which are blanks requiring further processing before they can be used as tools, should be classified under Item No. 51A(iii) of the Act or under Item 68. The respondents argued that since the tool bits were blanks and needed additional processes like grinding and sharpening before being used as tools, they should be classified under Item 68 instead of Item 51A(iii).

The Central Government, after examining the case records, took the view that the goods were offered for sale as tool bits and accepted as such by buyers, indicating that in trade or commerce, the goods were known as tool bits and not blanks. The Government issued a notice to the respondents under Section 36(2) of the Act to show cause why the Appellate Collector's order should not be set aside. The matter was transferred to the Tribunal for resolution.

During the proceedings, the Revenue defended the Superintendent's order and the proposal to reclassify the goods under Item No. 51A, while the respondents relied on a previous decision by the Tribunal regarding a similar issue. The Tribunal had previously held that tool blanks requiring further processing before being used as tools should not be classified under Item No. 51A(iii) but under Item 68 of the Act.

The Tribunal noted that the department did not dispute the respondents' claim that the tool bits manufactured by them were blanks requiring additional processing before use. The description of the goods as tool bits in the respondent's catalogue was considered as evidence of trade parlance, but the Tribunal emphasized that the respondents had consistently maintained that the tool bits could not be used directly without further processing. Based on previous decisions and the unrebutted claim of the respondents, the Tribunal upheld the Appellate Collector's decision that the goods should be classified under Item No. 68 of the Act.

In conclusion, the Tribunal upheld the impugned order, discharged the show cause notice, and dismissed the appeal, ruling that the tool bits were correctly classified under Item No. 68 of the Central Excises and Salt Act, 1944.