1994 (4) TMI 150 - AT - Central Excise

Summary

Issues: Classification of goods under Central Excise Tariff Act, 1985 - Sub-heading 85.09 vs. Sub-heading 84.37

Detailed Analysis:

1. Facts and Law Classification Dispute:
- The appeals involved a dispute regarding the correct classification of goods, namely "domestic electric mills" (DEFM), manufactured by the appellants.
- Original authority classified the product under sub-heading 85.09 of the Central Excise Tariff Act, 1985, while the appellants claimed classification under sub-heading 84.37 of the same Act.

2. Show Cause Notices and Allegations:
- Show cause notices were issued to the appellants alleging clearance of goods without paying central excise duty.
- The authorities contended that the product, a domestic Gharghanti, fell under sub-heading 85.09 as an electro-mechanical domestic appliance with a self-contained electric motor.

3. Contentions of Appellants - Meema Engineering Works:
- The appellants argued that their product should be classified under sub-heading 84.37, machinery used in the milling industry, and not under sub-heading 85.09.
- They claimed that their product, Gharghanti, without an electric motor, should be classified as flour mill machinery under sub-heading 84.37.

4. Lower Authorities' Decision and Appeals:
- The Assistant Collector and Collector upheld the classification under sub-heading 85.09, considering the product as an electro-mechanical domestic appliance.
- The appellants appealed, arguing that their product should be classified under sub-heading 84.37 based on the function and usage of the goods.

5. Judicial Interpretation and Rulings:
- The High Court of Gujarat and Madras had previously held that certain goods without an inbuilt electric motor were not classifiable as domestic electrical appliances.
- The Supreme Court's ruling in a separate case indicated that heavy-duty electric appliances for commercial use should be classified under a specific tariff item.

6. Tribunal's Decision and Justification:
- The Tribunal analyzed the classification issue, considering the specific descriptions under sub-headings 84.37 and 85.09.
- It concluded that the product in question, being used for domestic purposes, fell under sub-heading 85.09 as an electro-mechanical domestic appliance.

7. Final Decision and Remand:
- The Tribunal confirmed the lower authorities' classification under sub-heading 85.09 for the appellants' product.
- The matter was remanded to the original authorities to consider the appellants' claims for modvat benefit and exemptions under relevant notifications.

In conclusion, the judgment resolved the classification dispute by determining that the appellants' product, domestic electric mills, should be classified under sub-heading 85.09 as an electro-mechanical domestic appliance with a self-contained electric motor, based on its usage and characteristics for domestic purposes.