1996 (7) TMI 302 - AT - Central Excise

Summary

Issues: Classification of goods under Tariff Item 51A(iii) or Tariff Item 68

Classification under Tariff Item 51A(iii):
The Collector, Central Excise (Appeals) had classified the tool bits under Tariff Item 51A(iii) based on the argument that the bits are designed for use in machine tools, sold in standard sizes with only edge work left to be done by customers. The appellants challenged this classification, contending that the tool bits blanks require various processes like grinding, re-sharpening, and grooving before being considered finished tools falling under T.I. 51A(iii). They argued that such classification would lead to discrimination and cited judgments to support their case.

Classification under Tariff Item 68:
The respondent Collector argued that the tool bits were simple to use, designed for machines, and correctly classified under T.I. 51A(iii). The Tribunal noted the two competing entries for classification - Tariff Item 51A(iii) and Tariff Item 68. The Tribunal distinguished the present case from a previous judgment involving finished goods, emphasizing that the tool bits in question were blanks that required further processing before being usable as tools. Citing previous cases, the Tribunal held that blanks requiring additional processing like grinding and sharpening cannot be classified under T.I. 51A(iii) but under T.I. 68.

Judgment:
The Tribunal found that the tool bits blanks in the present case were similar to those in previous cases where it was held that blanks needing processing cannot be directly used as tools and should be classified under T.I. 68. Relying on precedents, the Tribunal allowed the appeal, classifying the blanks under T.I. 68. The decision highlighted that the blanks required additional processes before being usable as tool bits, aligning with the rationale of previous judgments. Consequential relief, if applicable, was to be granted in accordance with the law.