1991 (2) TMI 219 - AT - Central Excise

Summary

Issues: Classification of motor-vehicle parts under Tariff Item 52, limitation period for demand of duty, functional aspect of parts in addition to fastening.

In this judgment by the Appellate Tribunal CEGAT, New Delhi, the appellants, who manufacture motor-vehicle parts, contested the classification of certain items under Tariff Item 52 and the demands confirmed for a specific period. The controversy centered around parts that perform the function of fastening, particularly shackle pins. The appellants argued that the shackle pins primarily provide vibration dampening and shackle action, rather than fastening, and should be classified under T.I.68. They supported their argument with detailed explanations of the functions of the parts. The appellants also raised the issue of limitation, contending that the demand was time-barred due to the absence of allegations of suppression beyond a certain period. They cited relevant case laws to support their claims.

The judgment considered the arguments presented by both parties. The Tribunal analyzed the functions of the shackle pins and other parts in question as explained by the appellants. It noted that the parts were specially designed for specific functions, including providing shackling action and lubrication, in addition to any fastening aspect. The Tribunal also referenced a Tariff Advice indicating that parts with lubricating arrangements would be classified differently. The judgment highlighted a Supreme Court decision emphasizing the functional approach to classifying goods based on their primary functions. The Tribunal distinguished the case at hand from previous decisions involving special specifications and integral parts of machinery, indicating that the parts in question were not mere fasteners but served additional functions.

Regarding the limitation aspect raised by the appellant, the judgment deemed it irrelevant in light of the appeal's allowance. Consequently, the appeal was allowed, overturning the Collector's order. The judgment reiterated that fasteners solely performing fastening functions fall under Tariff Item 52, while those with additional functions and specially designed aspects are classified under the residuary Item 68, CET. The judgment referenced various case laws to support this classification principle, emphasizing the importance of the functional aspect in determining the classification of goods.