2000 (5) TMI 222 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 160/86 for excise duty classification regarding 'Sunflame Electric Coil Stove.'

Analysis:
The central issue in this case revolves around the classification of the product 'Sunflame Electric Coil Stove' under Notification No. 160/86 for excise duty purposes. The dispute arises from whether the product falls under S. No. 5(a)(x) or 5(d) of the said Notification. The manufacturer claimed duty exemption under 5(d) as a domestic electrical appliance, while the Revenue contended that it should be classified under 5(a)(x) attracting specified duty rates.

The Assistant Collector initially ruled in favor of the Revenue, classifying the product under 5(a)(x) and imposing duty. However, the Collector of Central Excise (Appeals) overturned this decision, siding with the manufacturer's classification under 5(d) and quashing the duty demand. Subsequently, the Revenue appealed to the Tribunal to challenge the Appeals Collector's decision, leading to the current proceedings.

Upon hearing both sides, the Tribunal analyzed the product's characteristics and utility. It noted that the 'electric coil stove' was essentially a heating element resembling a 'hot plate,' falling under 5(a)(x) of the Notification. The Tribunal rejected the manufacturer's attempt to reclassify the product under 5(d) to evade duty payment, emphasizing that the naming distinction did not alter the product's fundamental nature as a heating element akin to a hot plate.

In citing a precedent where a similar product was classified differently, the Tribunal expressed disagreement with that decision, asserting that the 'electric coil stove' should indeed be treated as a hot plate for duty assessment purposes. Given the conflicting interpretations, the Tribunal deemed it necessary to refer the matter to a Larger Bench for a definitive ruling on whether the product falls under 5(a)(x) or 5(d) of the Notification for excise duty payment.

In conclusion, the Tribunal's decision centered on the proper classification of the 'Sunflame Electric Coil Stove' under Notification No. 160/86 for excise duty assessment, emphasizing the product's essential characteristics and intended use to determine the applicable duty rates under the relevant sections of the Notification.