1995 (6) TMI 105 - AT - Central Excise

Summary

Issues Involved:
1. Validity of the show cause notice issued by the Superintendent.
2. Maintainability of the appeal when the Assistant Collector had agreed with the classification claimed by the appellant.
3. Correct classification of the product, whether under T.I. 30D or T.I. 68.

Detailed Analysis:

1. Validity of the Show Cause Notice:
The appellants had indicated in the remarks column of their classification list that the stators and rotors were not classifiable under T.I. 30D but under T.I. 68. The Assistant Collector approved the classification list without considering this protest. The Tribunal held that the approval of the classification list was not valid because the protest was not taken into account. Therefore, the show cause notice issued by the Superintendent was valid as it addressed the protest recorded by the appellants. The Tribunal stated, "The approval of the classification list was not valid inasmuch as the appellants were not given an opportunity of showing the cause as to why their protest should not be rejected."

2. Maintainability of the Appeal:
The appellants had lodged their protest regarding the classification of the product under T.I. 30D from the beginning. The Assistant Collector's approval did not consider this protest. The Tribunal concluded that the appeal before the Collector (Appeals) was maintainable because the appellants were not given an opportunity to represent their case, leading to a miscarriage of justice. The Tribunal emphasized, "In the absence of affording an opportunity to the appellants representing their case on the approval of the classification list was a failure, miscarriage of justice which was rectified by issue of show cause notice."

3. Correct Classification of the Product:
The Tribunal examined various circulars and trade notices, which clarified that rotors and stators forming component parts of monobloc pumps should pay duty under Item 30D. However, the Tribunal also considered the rulings of the Supreme Court in cases like Sahney Paris Rhone Ltd. and Paharpur Cooling Towers Pvt. Ltd., which indicated that items not solely electric motors but containing additional components should be classified under a different tariff item. The Tribunal concluded that the rotors and stators manufactured by the appellants, which were of a specific design for use in monobloc pumps and not interchangeable with those used in electric motors, should be classified under T.I. 68. The Tribunal stated, "We hold that rotors and stators manufactured by the appellants and captively used for manufacture of monobloc pump sets shall be classifiable not under Item 30D but under the then Tariff Item 68."

Conclusion:
The appeal was allowed, and the Tribunal directed that consequential relief, if any, should be provided to the appellants in accordance with the law. The Tribunal concluded, "Having regard to the above findings, the appeal is allowed. Consequential relief if any, shall be admissible to the appellants in accordance with law."