2001 (1) TMI 452 - AT - Central Excise

Summary

Issues:
Classification of Ceramic lined pulvarised fuel bends and Ceramic lined elbow under chapter 84.04 as parts of Boilers or as parts of general use under chapter 7307.

Analysis:
The appeal involved the classification of Ceramic lined pulvarised fuel bends and Ceramic lined elbow under chapter 84.04 as parts of Boilers or as parts of general use under chapter 7307. The authorities initially rejected the appellant's plea for classification under chapter 84.04 and re-classified them under chapter 7307 as articles of iron and steel. The appellant argued that the items should be classified as parts of Boilers under chapter 8404 due to the specific nature of the lining process with ceramic tiles, making them exclusive for use in Boilers. The appellant contended that the items were no longer parts of general use and should not be excluded under note 1(g) of Section XVI. The consultant cited precedents where similar pleas for classification as parts under chapter 84 were accepted. The authorities, however, maintained that the items remained as parts of general use under note 1(g) of Section XVI and should be classified under chapter 73.

Upon review, the Tribunal observed that Ceramic lined pipes and plates had been classified under chapter 8404 as parts of boiler/accessory plates, while the Ceramic lined bends and elbows were sought to be re-classified under chapter 73. The Tribunal noted that the items had undergone a specific process of lining with ceramic tiles for use in industrial boilers exclusively. Referring to previous judgments, including those of the Supreme Court and the High Court, the Tribunal concluded that after undergoing such processes, the items assumed special characteristics for use as parts of machinery and should be classified accordingly. The Tribunal found that the authorities had correctly dropped proceedings for the items already classified under chapter 8404 and should have applied the same reasoning to the Ceramic lined bends and elbows. The Tribunal emphasized that the activity of lining with ceramic tiles transformed the items into parts of boilers, negating the exclusion under note 1(g) of Section XVI. Consequently, the Tribunal set aside the impugned order and allowed the appeal, granting consequential relief as per law.