2000 (12) TMI 437 - AT - Central Excise

Summary

Issues:
Classification of Domestic Flour Mill without electrical motor under Heading 8437, applicability of Chapter 85 Note 3, relevance of Circular No. 82/82/94-CX for classification, exclusion of goods from Heading 85.09 under Note 3(b) of Chapter 85, consideration of drive mechanism for classification, binding nature of Board's Circulars on Revenue.

The Revenue filed an appeal against the Collector (Appeals) order classifying a Domestic Flour Mill without an electrical motor under Heading 8437. The Revenue argued that the mill should be classified under Heading 85.09 as it has a place for an electrical motor, even though the manufacturer does not provide one for commercial reasons. They contended that the decisions relied upon by the Collector (Appeals) were not relevant due to Chapter 85 Note 3, which covers electro-mechanical machines commonly used for domestic purposes. The Revenue also claimed that the type of grinding mill in question falls under machinery for milling industries, excluded from Heading 8437.

The Respondents argued that the item should be classified under Heading 84.37 based on Circular No. 82/82/94-CX, which the Tribunal did not consider. They highlighted that the goods in question do not fit under Heading 85.09 as they are not household appliances like vacuum cleaners or food grinders, and their weight exceeds the specified limits. The Tribunal noted that the drive mechanism of the product, using transmission belts, is crucial for classification and remanded the matter for redetermination by the original authority.

The Tribunal analyzed the HSN Notes under 85.09, emphasizing that appliances with a separate electric motor, operated by transmission belts, are excluded from this heading. They agreed with the Respondents that the drive mechanism is a key factor for classification and that the case law cited did not consider this aspect. The Tribunal also stressed the binding nature of Board's Circulars on Revenue, specifically Circular No. 82/82/94-CX, and directed the lower authorities to consider it during the remand proceedings.

In conclusion, the Tribunal allowed the Revenue's appeal for remand to the original authority for fresh adjudication, setting aside the previous order. The case highlighted the importance of considering the drive mechanism for classification, the relevance of Circulars issued by the Board, and the exclusion criteria under Chapter 85 for household appliances.