1996 (4) TMI 222 - AT - Central Excise

Summary

Issues: Classification of 'two way keys' and 'cotters' under Tariff Item 26AA (ia) or Tariff Item 68.

In this judgment by the Appellate Tribunal CEGAT, New Delhi, the issue involved the classification of 'two way keys' and 'cotters' used by the railways along with other products like 'dog spikes' and 'loose jaws.' The original authority rejected the refund claims of the assessee, classifying the goods under Tariff Item 68 instead of Tariff Item 26AA (ia) as claimed by the assessee. The Collector (Appeals) classified all products under Heading 26AA (ia) after studying the manufacturing process, which was accepted by the revenue for 'dog spikes' and 'loose jaws.' The appeals challenged the classification of 'two way keys' and 'cotters.'

The JDR for the revenue argued that the special shaping of 'two way keys' and 'cotters' through various processes resulted in new products with different characteristics, not merely forged goods, and should be classified under Tariff Item 68. However, the advocate for the assessee explained the manufacturing process, emphasizing that the processes did not convert the goods into identifiable parts of any other apparatus, warranting their inclusion under Tariff Item 68.

The Tribunal analyzed the arguments and manufacturing processes. For 'two way keys,' cutting the flat into sections and grinding the cut ends did not amount to manufacture, as the processes did not justify classification under Tariff Item 68. Similarly, for 'cotters,' cutting the flat into pieces and notching did not result in a new commodity, remaining identifiable as a cut piece of flat. The Tribunal also considered a circular issued by the Board advising classification under Tariff Item 26AA (ia) for the goods in question unless additional processes like machining, polishing, or grinding were carried out.

Ultimately, the Tribunal found no merit in the appeals and rejected them, upholding the classification of 'two way keys' and 'cotters' under Tariff Item 26AA (ia) based on the manufacturing processes and the Board's circular guidance.