2001 (2) TMI 366 - AT - Central Excise

Summary

Issues:
Classification of "Fan Regulator" under sub-heading 8414.20 or 8414.99.

Detailed Analysis:
1. Facts and Background: M/s. Kumar Traders manufactured "Fan regulators" classified under sub-heading 8414.20 until Rule 173B amendment in 1995. The Department then directed reclassification under sub-heading 8414.99, leading to a Show-cause Notice and subsequent reclassification.

2. Appellant's Arguments: The appellant argued that a "fan regulator" is essential for an electric fan to function properly, emphasizing its role in regulating current and motor functions. They contested the reclassification, citing lack of changes in the product's nature or use. The appellant criticized the reliance on Circular No. 192/26/96-CX and asserted that departmental directives do not bind taxpayers.

3. Revenue's Position: The Revenue, represented by Shri R.K. Roy, supported the reclassification under sub-heading 8414.99, maintaining the correctness of the initial classification decision.

4. Tribunal's Decision: After considering both parties' arguments and reviewing the records, the Tribunal upheld the reclassification under sub-heading 8414.99. They highlighted the Board's Circular clarifying that when regulators are not sold with fans, they fall under sub-heading 8414.99 as parts and accessories. Since the "fan regulators" were sold independently under a specific brand, they were correctly classified as per the Circular. The Tribunal found no grounds to overturn the lower authorities' decision and rejected the appeal accordingly.

5. Conclusion: The Tribunal concluded that the reclassification was justified based on the specific circumstances and the Board's Circular, which guided the classification of "fan regulators" sold separately. As a result, the appeal was dismissed, affirming the classification under sub-heading 8414.99.

This detailed analysis outlines the classification dispute regarding "Fan Regulators" and the Tribunal's decision based on the arguments presented by both parties and relevant legal provisions.