1994 (5) TMI 112 - AT - Central Excise

Summary

Issues Involved:
1. Availability of exemption under Notification No. 107/88, dated 1-3-1988 for the product "knives with cutting blades serrated or not".
2. Correct classification of the product "knife-cum-scissor sharpener".

Detailed Analysis:

1. Availability of Exemption under Notification No. 107/88, dated 1-3-1988:

The primary issue was whether the product "knives with cutting blades serrated or not" is eligible for exemption under Notification No. 107/88, dated 1-3-1988. The appellant argued that the preamble of the notification did not specify sub-headings of Chapter 82 and that the product should fall within the description given in Serial No. 03 of the notification, which includes "Spoons, forks, ladle, skimmers, cake-servers, fish-knives, butter-knives, sugar tongs and similar kitchen or tableware". The appellant contended that since the notification did not specify sub-headings, the product should be entitled to the benefit as it satisfies the description of Serial No. 03.

The Tribunal, however, found no merit in this argument. It concluded that the description in Serial No. 03 of the notification clearly refers to goods described in Heading 82.15, not Heading 82.11 which covers "knives with cutting blades, serrated or not". The Tribunal relied on the HSN Explanatory Notes, which distinguish between cutting and non-cutting knives, with cutting knives classified under Heading 82.11 and non-cutting knives like fish-knives and butter-knives under Heading 82.15. Therefore, the Tribunal upheld the Revenue's decision to deny the exemption, confirming that knives with cutting blades do not fall under the description of Serial No. 03 of the notification.

2. Correct Classification of the Product "Knife-cum-Scissor Sharpener":

The second issue concerned the correct classification of the product "knife-cum-scissor sharpener". The appellant classified it under sub-heading 3926.90 as "other articles of plastic", claiming it should be exempt under Notification No. 53/88, dated 1-3-1988. The Revenue, however, classified it under Heading 8205 as a "hand tool".

The Tribunal upheld the Revenue's classification, relying on the HSN Explanatory Notes which include "steel and other knife sharpeners of metal" under Heading 82.05. It emphasized that the classification should be based on the essential character of the goods, which in this case is a hand tool used for sharpening. The Tribunal found that the product did not qualify as an article of plastic despite the appellant's certificates from traders, as statutory definitions and chapter notes take precedence over trade and commercial understanding. The Tribunal also referred to the Supreme Court's ruling in Atul Glass Industries Ltd. v. Collector of Central Excise, which emphasized that the functional character of a product determines its classification.

Conclusion:

The Tribunal dismissed the appeals, affirming the Revenue's decisions on both issues. It held that the exemption under Notification No. 107/88 was not applicable to "knives with cutting blades serrated or not" as they fall under Heading 82.11, not Heading 82.15. Additionally, it confirmed the classification of the "knife-cum-scissor sharpener" under Heading 8205 as a hand tool, not as an article of plastic.