2000 (11) TMI 488 - AT - Central Excise

Summary

Issues:
1. Classification of conveyor system parts under different headings.
2. Consideration of separate manufacturing units as the same entity.
3. Prospective or retrospective nature of demands for duty payment.

Issue 1: Classification of conveyor system parts under different headings
The judgment involves two appeals concerning the classification of conveyor system parts. In Appeal No. E/4855/91B, the Collector approved a revised classification list, ordering it to be operative only after the show cause notice was issued proposing a change in classification. No cross appeal was filed by the Revenue against this order. In Appeal No. E/111/93, the Commissioner classified parts cleared from different manufacturers as parts of the conveyor system under heading 84.31, rejecting the contention that they constituted a complete system. The Tribunal analyzed previous decisions and arguments regarding classification under different headings, emphasizing the importance of what is manufactured and cleared from the factory.

Issue 2: Consideration of separate manufacturing units as the same entity
The Tribunal considered the argument that three units of the same corporate entity situated in different municipal limits should be considered as the same manufacturer. However, Rule 174 mandates separate registrations for manufacturers of excisable goods at different premises. The Tribunal highlighted that the conveyor system comes into existence only at the buyers' site, and the parts cleared from different factories should be classified as parts of the system under heading 84.31. The judgment cited the Supreme Court's decision in Narne Tulaman Manufacturers Pvt Ltd. to support this classification approach.

Issue 3: Prospective or retrospective nature of demands for duty payment
The Tribunal examined the prospective or retrospective nature of demands for duty payment. It noted that the Commissioner (Appeals) held the classification to be prospective in one case, which was not challenged by the Revenue. In another case, the order confirmed the demand for duty payment for a specific period, which was not considered retrospective. The judgment emphasized the importance of issuing show cause notices within six months of clearance and upheld the demands confirmed by the lower authorities in both appeals.

In conclusion, the Tribunal found no reasons to interfere with the classification of the entity as parts under heading 84.31 and upheld the demands as confirmed. Both appeals were rejected based on the detailed analysis of the classification issues and the prospective nature of demands for duty payment.