1997 (8) TMI 287 - AT - Central Excise

Summary

Issues:
Classification of Tacho Generator and parts thereof under different tariff headings.

Analysis:
The appeal concerns the classification of Tacho Generator and its parts. The lower appellate authority classified the goods under Heading 90.29 for Tacho Generator and 90.33 for its parts, while the Revenue sought classification under Heading 85.01 for Tacho Generator and 85.03 for its parts, which cover electric generators. The main issue is whether the Tacho Generator, which generates electrical impulses corresponding to mechanical energy, should be classified as a generator under Heading 85.01 or under Tariff Heading 9029.00. The assessment of parts depends on the classification of the main equipment, the Tacho Generator.

The Department argued that the Tacho Generator has multiple uses and can be used with various equipment, suggesting that the classification should be based on the equipment it is used with. They contended that the lower appellate authority did not consider the multiple uses of the Tacho Generator and failed to refer to relevant chapter notes and HSN notes. The Chartered Accountant for the respondent argued that the Tacho Generator would be used for controlling eddy current drives falling under Heading 85.01, supporting the lower appellate authority's decision.

Upon considering both arguments, it was observed that the Tacho Generator is a multipurpose equipment used as part of control mechanisms for various applications. For classification under Heading 90.29 and 90.33, it must either fall within the description of these headings or be classified as per chapter notes. In this case, it needs to be used as an accessory with other equipment for the control mechanism to function. If used with equipment under Heading 90.29, it can be classified accordingly. However, since the lower appellate authority did not delve into whether the Tacho Generator is used with equipment under Heading 85.01, it was deemed appropriate to remand the matter for further consideration. The impugned order was set aside, and the case was remanded to the CCE(A) for a fresh assessment based on the observations made. The appeal was allowed by remand.