1998 (4) TMI 308 - AT - Central Excise

Summary

Issues: Classification of goods under Tariff Heading, Benefit of Notification No. 175/86, Marketability of the product, Imposition of penalty

Classification of goods under Tariff Heading:
The case involved a dispute regarding the classification of Battery Eliminators manufactured by the appellant firm. The Revenue argued that the Battery Eliminators fell under Tariff Heading 85.04 as a static converter, while the appellant contended that they should be classified under Tariff Heading 85.29 as a part of electrical apparatus/appliance. The Tribunal analyzed the functions of the Battery Eliminators and concluded that they indeed functioned as static converters, converting Alternative Current (A.C.) into Direct Current (D.C.), and therefore, should be classified under Tariff Heading 85.04.

Benefit of Notification No. 175/86:
The appellant firm had been availing the benefit of Notification No. 175/86 for two items to the extent of Rs. 15.00 lakhs. However, the Revenue contended that since both items manufactured by the appellant fell under the same Tariff Heading 85.04, the benefit of exemption should only be Rs. 15.00 lakhs for both items combined. The Tribunal upheld the Revenue's position, denying the full benefit of the notification to the appellant.

Marketability of the product:
The appellant's counsel argued that the Battery Eliminators produced by the firm were not marketable as they lacked a protection-cover and were specifically used by M/s. Pieco Electronics in the manufacture of transistor sets. However, the Revenue contended that since the goods were sold to M/s. Pieco Electronics, their marketability was established. The Tribunal agreed with the Revenue, emphasizing that the goods had been sold, indicating their marketability.

Imposition of penalty:
In addition to the duty demand, a penalty of Rs. 25,000.00 was imposed on the appellants by the Commissioner. The Tribunal, considering the appellant firm's status as a small-scale manufacturer, reduced the penalty to Rs. 10,000.00. The Tribunal confirmed the imposition of the penalty but modified the quantum due to the overall circumstances of the case.

In conclusion, the Tribunal upheld the Revenue's classification of the Battery Eliminators under Tariff Heading 85.04, denied the full benefit of Notification No. 175/86 to the appellant, confirmed the duty demand, and reduced the penalty imposed on the appellants. The appeal was disposed of with the modified penalty amount, maintaining the decision on other aspects of the case.