1995 (5) TMI 120 - AT - Customs

Summary

Issues:
- Classification of goods as finished articles or rough steel forgings
- Applicability of Rule 2(a) of rules for interpretation of Tariff Schedule
- Interpretation of judgments related to classification of goods

Classification of goods as finished articles or rough steel forgings:
The case involved an appeal against an order allowing a refund claim for Rotor Claw Forgings, classified under Heading Nos. 73.33/40(1) of the Customs Tariff Act. The Revenue contended that the forgings, with specific part numbers and manufactured according to drawings, had the essential characteristics of finished articles. They argued that the forgings should be classified as finished articles under 85.08 of the CTA, considering them as parts of alternators for I.C.P. Engines. On the other hand, the Collector held that the goods had not attained the essential character of finished articles and were rough steel forgings. The Collector noted that further operations like drilling and machining were required before fitting them in alternators. The Tribunal analyzed previous judgments and concluded that the goods, requiring various processes like machining and drawing, should be considered as forged articles and not parts of finished goods. The Tribunal agreed with the Collector's findings and rejected the appeal, distinguishing the case from previous rulings like Bajaj Auto Ltd.

Applicability of Rule 2(a) of rules for interpretation of Tariff Schedule:
The Revenue argued that Rule 2(a) should be applied, considering the forgings as finished articles based on their shape and outline resembling finished articles. However, the Collector and the Tribunal found that the goods did not meet the criteria under Rule 2(a) as they had not reached the semi-finished stage and required additional processes before being considered finished articles. The Tribunal referenced judgments like Telco v. Collector of Customs and Shivaji Forgings Ltd. v. Collector of Central Excise to support their decision that Rule 2(a) was not applicable in this case.

Interpretation of judgments related to classification of goods:
The Tribunal extensively reviewed previous judgments, including Bajaj Auto Ltd., M/s. BHEL, Shivaji Works Ltd., Aravali Forgings Ltd., and M/s. Wesman Halverscheidt Forgings Ltd. & Others. These judgments discussed the scope of Interpretative Rule 2(a) and Rule 2(b) in determining the classification of goods as finished articles or forged articles requiring further processing. The Tribunal emphasized that goods needing various operations like drilling and machining should be considered as forged articles and not finished goods. They concluded that the Collector had correctly assessed the goods as rough steel forgings and upheld the decision based on the cited judgments. The Tribunal rejected the appeal, finding no merits in reclassifying the goods as finished articles.