1997 (12) TMI 267 - AT - Central Excise

Summary

Issues:
1. Classification of bearing caps for jeeps under Chapter Heading 73.80.90 and exemption under Notification 217/85.
2. Appeal against the Collector (Appeals) order allowing exemption under Notification No. 217/85.

Issue 1: Classification of bearing caps and exemption under Notification 217/85:
The Respondents classified bearing caps under Chapter Heading 73.80.90 and claimed exemption under Notification 217/85. The Assistant Collector observed that the bearing caps were not parts of diesel-operated Internal Combustion Engines and were wrongly classified, leading to a demand notice. The Respondents argued that the bearing caps were parts of diesel engines, supported by certificates from Mahindra and Mahindra. They requested reclassification under Chapter Heading 84.90 and claimed entitlement to the exemption under Notification 217/85. The Revenue contended that the exemption did not apply to goods classified under Heading 73.08. The Tribunal noted that the bearing caps were wrongly classified under Heading 73.08 instead of 84.09 but were parts of diesel engines. The goods were entitled to exemption under Notification 217/85 as they fell under Chapter Heading 84.09, despite the initial incorrect classification. The Tribunal upheld the Collector (Appeals) order, rejecting the Revenue's appeal.

Issue 2: Appeal against the Collector (Appeals) order allowing exemption under Notification No. 217/85:
The Revenue appealed against the Collector (Appeals) order granting exemption under Notification No. 217/85, arguing that goods classified under Heading 73.08 were not eligible for the exemption. They cited a case in support of their contention that a demand can be raised within six months even after the approval of classification. The Tribunal analyzed the classification issue and the applicability of the exemption. It affirmed that the goods, despite the initial incorrect classification, were parts of diesel engines classifiable under Chapter Heading 84.09 and thus entitled to the exemption under Notification 217/85. The Tribunal upheld the Collector (Appeals) order, dismissing the Revenue's appeal.

In conclusion, the Tribunal determined that the bearing caps were wrongly classified under Heading 73.08 but were parts of diesel engines falling under Chapter Heading 84.09. The initial misclassification did not alter the nature of the goods, making them eligible for the exemption under Notification 217/85. The Collector (Appeals) decision was upheld, and the Revenue's appeal was rejected.