1997 (4) TMI 160 - AT - Central Excise

Summary

Issues: Classification of gearwheels, shafts, and pulleys under Central Excise Tariff.

In the judgment delivered by the Appellate Tribunal CEGAT, New Delhi, the issue revolved around the classification of gearwheels, shafts, and pulleys by M/s. Textool Co. Ltd., a manufacturer of textile machinery and parts. The appellant sought classification under Heading No. 84.48 of the Central Excise Tariff, covering ancillary machinery for use with machines under Heading No. 84.45. However, the Department argued for classification under Heading No. 84.43, as these parts were specifically included in that Tariff Entry. The Collector of Central Excise (Appeals) upheld this classification, stating that specific mention under a heading necessitates classification therein, regardless of the principal use. The tribunal noted the Section Note 2 of Section XVI, which mandates classification of goods in their respective headings if included, leading to the affirmation of the Collector's decision.

The tribunal analyzed the arguments presented by the appellant and the Revenue. The Revenue contended that if parts were specifically mentioned in a Tariff Entry, they must be classified accordingly, especially if solely or principally usable with a particular machine. As the shafts, gearwheels, and pulleys were specifically included in Heading No. 84.83, the Revenue supported the Collector's classification decision. The tribunal examined the Chapter Notes and Section Notes, emphasizing the rule that parts included in specific headings must be classified there, aligning with the Revenue's position.

The tribunal delved into the detailed reasoning provided by the Collector of Central Excise (Appeals) in paragraphs 4.1 and 4.2 of the order. The Collector highlighted the precedence of specific provisions of the Act over subordinate legislation like Central Excise Rules, emphasizing the correctness of classification for recovery of short levy. Additionally, the tribunal discussed the application of Section Note 2 of Section XVI, reiterating the classification mandate for goods included in specific headings, thus supporting the Collector's decision.

Ultimately, the tribunal found no fault in the Collector's classification decision, as it aligned with the statutory provisions and notes governing the classification of parts under the Central Excise Tariff. Consequently, the appeal by M/s. Textool Co. Ltd. was dismissed, affirming the classification of gearwheels, shafts, and pulleys under Heading No. 84.83 based on their specific inclusion in the Tariff Entry.