2000 (6) TMI 447 - AT - Central Excise

Summary

Issues:
Classification of 'Copper Bronze Castings' under Central Excise Tariff Act - Sub-heading 7419.91 or 8413.13, Non-marketability plea, Application of Rule 2(a) of Interpretative Rules, Machining operations on castings, Applicability of Board's Circular No. 225/59/96-CX

Classification Issue:
The central issue in the appeals before the Appellate Tribunal was the classification of 'Copper Bronze Castings' manufactured by M/s. WPIL Ltd. under the Central Excise Tariff Act. The dispute revolved around whether these castings should be classified under Sub-heading 7419.91 as claimed by the revenue or under Sub-heading 8413.13 and exempted from duty under Notification No. 8/96. The Commissioner (Appeals) had ruled in favor of the Respondents, considering the machining operations carried out on the castings in the Respondent's unit, which contributed to finishing or changing the form of the castings, thus classifying them as parts of submersible pumps under Chapter 84.

Non-Marketability Plea:
The Respondents sought to introduce a plea of non-marketability of the copper bronze castings during the appeal stage. However, the Appellate Tribunal rejected this plea, emphasizing that new arguments cannot be raised at the appeal stage if they were not presented before the lower authorities. The Tribunal highlighted that marketability is a matter of fact and should have been raised in response to the show-cause notice, rather than after adjudication.

Application of Rule 2(a) of Interpretative Rules:
The classification of the castings was also analyzed in light of Rule 2(a) of the Interpretative Rules. The Tribunal considered the Commissioner (Appeals)'s application of Rule 2(a) to classify the castings under Chapter 84, which was contested by the Respondents. The Tribunal referred to a previous judgment to differentiate between castings and parts, emphasizing that castings themselves cannot be treated as parts under Chapter 84, 85, and 87.

Machining Operations on Castings:
The dispute further delved into whether machining operations were performed on the castings by M/s. WPIL Ltd. The Respondents denied conducting any machining on the castings, while the revenue argued that the castings were actively consumed within the factory for manufacturing submersible pumps and parts thereof. The Tribunal noted discrepancies in the classification of castings in invoices and upheld the revenue's argument regarding the machining operations, leading to the castings being classified under Sub-heading 7419.91.

Applicability of Board's Circular No. 225/59/96-CX:
The Respondents referenced Board's Circular No. 225/59/96-CX to support their classification of the castings under Heading No. 84.13, citing that castings not requiring post-molding machining are considered machine parts. However, the Tribunal found no evidence to support this claim, emphasizing that the castings did not meet the criteria of precision castings or being ready for use as machine parts. Consequently, the Board's Circular was deemed inapplicable, and the appeals filed by the Revenue were allowed.