1998 (8) TMI 265 - Commissioner - Central Excise

Summary

Issues:
Classification of cement making machinery parts for duty calculation under different tariff headings.

Analysis:
The appeal was filed against an Order-in-Original passed by the Assistant Commissioner of Central Excise regarding the classification of parts of cement making machinery for duty calculation. The appellants contended that they received orders for a Turnkey project for supplying cement making machinery, and due to the size and weight of the machinery, they dispatched parts periodically until the complete machinery was manufactured. They argued that duty was paid at the correct rate based on the judgment of the Patna High Court regarding CKD condition assembly. The dispute centered around whether the machinery should be classified under specific sub-headings for parts or as a complete machinery unit. The lower authority concluded that the parts were cleared individually and never formed the complete machinery in the factory, based on invoices covering only parts. However, the Commissioner disagreed, noting that the machinery weighing 300 MT couldn't be fully made and transported in one lot, and must be manufactured and transported part by part. The contract with the purchaser and the invoices indicated the clearance of part consignments of the machinery, which should be assessed as a complete machinery in knocked down condition. Referring to Rule 2(a) of the Rules for Interpretation, the Commissioner ruled that incomplete or unfinished goods with the essential character of complete goods should be classified as complete goods, not parts. Consequently, the appeal was allowed, and the lower authority's order was set aside.