1997 (5) TMI 184 - AT - Central Excise

Summary

Issues: Classification of goods under Heading No. 74.01 for Modvat credit eligibility.

In the appeal before the Appellate Tribunal CEGAT, New Delhi, the issue revolved around the classification of phosphor bronze for the availment of Modvat credit. The appellant, M/s. CMC Commutators (P) Ltd., sought to classify their product under Heading No. 74.01 of the Tariff to claim deemed Modvat credit. The dispute arose as the revenue authorities contended that the goods should be classified under Heading No. 74.03, thereby denying the Modvat credit. The Collector of Central Excise (Appeals) in Madras held that while the goods were classifiable under Heading No. 74.01, they were not eligible for deemed Modvat credit under this classification.

Upon careful consideration, the Tribunal analyzed the composition of the phosphor bronze in question, noting that it primarily consisted of copper with tin and phosphor as minor constituents. The Tribunal referred to the relevant tariff provisions and noted that under Section Note 4, any reference to a base metal includes alloys classified as alloys of that metal. Given that copper predominated in the composition, the Tribunal concluded that the goods should be treated as a copper alloy and classified under Heading No. 74.01.

The Tribunal further examined the classification of the goods as phosphor bronze ingots and disagreed with the adjudicating authority's classification under Heading No. 74.13, which covered different copper articles not akin to the ingots in question. Observing that the ingots were specifically included in sub-heading 7401.00, the Tribunal held that the classification under Heading No. 74.13 was incorrect. Consequently, the Tribunal determined that the goods were eligible for deemed Modvat credit under Heading No. 74.01, and the denial of such credit was unwarranted.

In conclusion, the Tribunal upheld the appellant's classification under Heading No. 74.01 and set aside the order-in-appeal, reinstating the original order. The appeal was allowed in favor of the appellant, granting them the benefit of deemed Modvat credit for the phosphor bronze ingots used in the manufacture of electric motors.