1990 (2) TMI 182 - AT - Central Excise

Summary

Issues:
Classification dispute regarding Radiator Assys and Radiator Cores for supply to Indian Railways under Chapter Heading 86.07 by the appellant and under 84.09 by the Department.

Detailed Analysis:

1. The classification dispute arose concerning Radiator Assys and Radiator Cores supplied to Indian Railways, with the appellant seeking classification under Chapter Heading 86.07 and the Department under 84.09. The Assistant Collector approved the classification under 86.07 from March 1, 1986. Show cause notices were issued for a demand of Rs. 4,75,945.00, revising the classification under Heading 84.09 for the period from July 1987 to November 1987, which was confirmed by the Assistant Collector and upheld by the Collector (Appeals), leading to this appeal.

2. The appellant's representative argued that the Radiator Assys and Cores were specially designed as per Indian Railways' orders for Diesel Locomotives and should be classified under sub-heading No. 8607.00 of the Central Excise Tariff. The legal issue of reviewing the classification list approved on April 22, 1987, was raised.

3. The appellant contended that other manufacturers classified similar radiators under 86.07, alleging discrimination. They argued that the radiators were specifically designed for fitment to Locomotives, not Diesel engines, supported by evidence from Diesel Locomotive Works Varanasi.

4. The appellant emphasized that changing the approved classification list after two years would cause hardship and cited relevant case law to support their argument against abrupt changes in classification without cogent reasons.

5. The Department argued that radiators used in engines fell under Heading 84.09, citing specific tariff headings and legal provisions to support their classification.

6. The Department maintained that specific tariff headings should be preferred over general headings, referring to a Supreme Court decision. They argued that radiators were part of the engine, not the Locomotive, supported by a letter from the Indian Railways.

7. The appellant clarified that the relevant Section Note was 2(e) of Section XVII, asserting that the radiators were parts of Railway Locomotives, not IC engines, making Note 2(e) irrelevant.

8. After examining the submissions, the Tribunal concluded that the radiators should be classified under 86.07 as parts of Railway Locomotives, considering the design and location of the radiators with the Locomotives rather than the Diesel engines, in line with the classification by other manufacturers.

9. The Tribunal noted that the appellant had classified radiators for engines under 84.09 themselves, without dispute, but the appeal regarding radiators as parts of Railway Locomotives was allowed, avoiding discussion on the revised classification issue, as the main classification issue was decided in favor of the appellant, leading to the appeal being allowed.