1993 (8) TMI 165 - AT - Central Excise

Summary

Issues:
Classification of Suspension Axle Bearings under Central Excise Tariff - Whether classified under 8503.00, 8485.90, or 8607.90.

Detailed Analysis:

Issue 1: Classification of Suspension Axle Bearings
The main issue in this case revolved around the classification of Suspension Axle Bearings manufactured and cleared from 1-3-1986 onwards. The Assistant Collector classified the goods under 8503.00, while the appellants claimed classification under 8485.90 or 8607.90. The Collector (Appeals) held that these bearings are parts of traction motors meant for railway locomotives, classified as electric motors under Heading 8501.00, with parts thereof under 8503.00, thereby rejecting the appeal.

Issue 1a: Nature of Suspension Axle Bearings
The appellants contended that the bearings are not solely or principally used in traction motors and are not integral parts, as they function as attachments and can be used in different machines based on size and diameter. They argued that the bearings are only used to support the traction motor, connecting it to the locomotive axle, and do not have electrical connectors, falling outside Chapter 85.

Issue 1b: Applicability of CCCN Explanatory Notes
Referring to CCCN Explanatory Notes, the appellants argued that parts common to different machines should be classified under Heading 84.85 (if not electrical) or 85.28 (if electrical). They highlighted that Heading No. 84.65 of CCCN corresponds to Heading No. 84.85 of the Central Excise Tariff, covering all non-electrical parts, indicating that Suspension Axle Bearings should be under 8485.90, not 8503.00.

Issue 1c: Interpretative Rules and Classification
The appellants also invoked Interpretative Rules, specifically Rule 3(a), asserting that since the bearings are used with traction motors designed for railway locomotives, they could alternatively be classified under 8607.90. They emphasized that the basic character, function, and use of the product are crucial for correct classification.

Issue 2: Procedural Irregularities
The judgment highlighted procedural irregularities, noting that no show cause notice was issued despite the Collector (Appeals) directing a re-adjudication with necessary verification and fresh opportunity for the appellants. The Assistant Collector's failure to issue a show cause notice was criticized, although the appellants' subsequent waiver hindered their ability to challenge this issue at the appeal stage.

Issue 3: Failure to Address Submissions
Moreover, it was observed that the Collector (Appeals) did not address all submissions made before her, failing to acknowledge mistakes by the Assistant Collector and not providing findings on aspects like time bar. The judgment emphasized the importance of considering all relevant submissions and procedural requirements in decision-making.

Conclusion
Ultimately, the impugned orders were set aside due to serious irregularities, including the failure to follow directives, lack of proper consideration of submissions, and absence of technical literature or catalogues to support classification decisions. The judgment underscored the necessity of procedural adherence and thorough examination of all relevant factors in determining the correct classification of goods under the Central Excise Tariff.