2001 (5) TMI 376 - AT - Central Excise

Summary

Issues:
Challenging reclassification of items by the Commissioner (Appeals) under specific chapters.

Analysis:
1. The appellants, a PSU, contested the reclassification of three items by the Commissioner (Appeals). The Revenue argued for classifying the first two items under 85.43 and the third under 85.37 based on individual function. However, the appellants asserted that these items were "off-line training devices" and should be classified under Chapter 90, not as individual machines under Chapter 85.

2. The appellants relied on a previous judgment involving PMT Machines Tool and Automatics Ltd., where it was held that equipment used for training should be classified under Chapter 90.23. They argued that this precedent applied to their case. Regarding the third item, a sub-station supervisory system, they presented technical literature and expert opinions to support its classification as a measuring instrument under Chapter 90.30, emphasizing its primary function of measuring electrical quality.

3. The Revenue defended the reclassification, stating that the first two items had individual functions and should be classified accordingly. They argued that the third item, the supervisory system, was a control panel with measuring instruments incorporated, justifying its classification under 85.37. They contended that the presence of measuring instruments did not warrant classification under Chapter 90.30.

4. Upon reviewing the submissions and evidence, the Tribunal referenced the PMT judgment, emphasizing the distinction between simulators and control panels. The Tribunal found that the first two items were akin to training equipment and should be classified under Chapter 90.23, overturning the reclassification under Chapters 85.43 and 85.37. For the sub-station supervisory system, the Tribunal upheld the appellants' classification under Chapter 90.30 based on technical literature and expert opinions, overturning the Commissioner (Appeals) decision to classify it under 85.37.

5. In conclusion, the Tribunal set aside the reclassification under Chapters 85.43 and 85.37 for the first two items, upholding their classification under Chapter 90.23. Additionally, the Tribunal affirmed the appellants' classification of the sub-station supervisory system under Chapter 90.30, overturning the Commissioner (Appeals) decision to classify it under 85.37. The appeal was allowed based on the detailed analysis and application of relevant legal principles and precedents.