2000 (12) TMI 406 - AT - Central Excise

Summary

Issues Involved:
1. Distinction between "bushes" and "washers."
2. Classification of the goods under Heading 86.07 or sub-heading 3926.90.
3. Eligibility of the goods for the benefit of Notification No. 53/88.

Detailed Analysis:

1. Distinction between "Bushes" and "Washers"

The core issue revolves around whether "bushes" can be equated with "washers" for classification purposes. The Revenue argued that bushes and washers serve different technical applications. According to the Dictionary of Scientific and Technical Terms, a "bush" is defined as "to line with a bushing as an axle bearing," whereas a "gasket-washer" is "a packing made of deformable material usually in the form of a sheet or ring used to make a pressure-tight joint between stationary parts."

The lower appellate authority had equated bushes to washers, relying on definitions from various technical dictionaries. However, the Revenue contended that bushes are used as anti-friction devices and have different applications from washers. The Hon'ble Vice President agreed with the Revenue, emphasizing that bushes are more akin to bearings due to their anti-friction and supportive roles, whereas washers are primarily used to tighten joints and prevent leakage.

2. Classification under Heading 86.07 or sub-heading 3926.90

The Revenue sought classification under Heading 86.07, which covers "parts of railway or tramway locomotives or rolling stock." The Revenue relied on HSN Explanatory Notes, which include parts of brake gear under this heading. The lower appellate authority had classified the goods under sub-heading 3926.90 as "other articles of plastic," based on their end-use and material.

The Hon'ble Vice President argued that bushes designed for use in railway brake systems should be classified under Heading 86.07, regardless of their material. He noted that the bushes are specifically designed for the braking system of railways, making them identifiable as parts suitable for use solely or principally with railway rolling stock. Therefore, they should be classified under Heading 86.07.

The Third Member concurred with the Vice President, stating that bushes are not covered under the exclusions of Section Note 2 of Section XVII and are appropriately classifiable under Heading 86.07.

3. Eligibility for the Benefit of Notification No. 53/88

Notification No. 53/88 provides exemptions for certain products falling under Chapter 39. The lower appellate authority had granted this exemption to the respondents. However, the Revenue disputed this, arguing that once classified under Heading 86.07, the goods would not be eligible for the exemption under Notification No. 53/88.

The Hon'ble Vice President and the Third Member both concluded that since the bushes are classifiable under Heading 86.07, they are not entitled to the exemption under Notification No. 53/88.

Majority Order:

The majority decision, including the views of the Third Member, classified the bushes under Heading 86.07 of the Schedule to the CETA, 1985. Consequently, the goods are not eligible for the benefit of Notification No. 53/88. The impugned order was set aside, and the appeal of the Revenue was allowed.