2000 (1) TMI 248 - AT - Central Excise

Summary

Issues: Classification of chain conveyor without drive under Central Excise Tariff headings 8428 and 8431, Time-barred demand, Definition of conveyor without electric motor.

Classification Issue:
The appeal was filed against the order-in-appeal by the Collector of Central Excise, where it was held that a chain conveyor without drive falls under heading 8428. The respondents cleared the goods without drive and claimed classification under heading 8428, which was approved. However, a show cause notice was issued later for reclassification under heading 8431 as parts of conveyors, demanding differential duty. The adjudicating authority confirmed this reclassification, but the appeal by the respondents was allowed. The Revenue argued that a chain conveyor without drive is rightly classifiable under heading 8431 as parts of conveyors, as it functions only as part of a conveyor. The respondents contended that even without a drive, a chain conveyor is still a conveyor, as the electric motor is merely a motive force or starting device, and the ability to convey material defines it as a conveyor. The Tribunal held that the respondents' classification under heading 8428 was correct, as conveyors are used for moving goods, and the absence of an electric motor does not change its classification.

Time-barred Demand Issue:
The respondents argued that the entire demand was time-barred, as they had initially classified the product under heading 8428, which was approved, and the show cause notice for reclassification was issued later. Citing the decision in the case of Cotspun Ltd., they contended that duty can only be demanded from the date of reclassification. The Tribunal agreed, holding that the demand was time-barred based on the Supreme Court's decision.

Definition of Conveyor Issue:
The Tribunal further analyzed the definition of a conveyor without an electric motor. Referring to the HSN Explanatory Notes, it was noted that conveyors are used for moving goods, sometimes over long distances, and include continuously-moving elements. The electric motor serves as a driving force, but the absence of it does not negate the classification of a conveyor. The Tribunal found no fault in the order-in-appeal, rejecting the Revenue's appeal.

In conclusion, the Tribunal upheld the classification of the chain conveyor without drive under heading 8428, deemed the demand as time-barred, and affirmed that a conveyor without an electric motor still qualifies as a conveyor under the Central Excise Tariff.