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TMI Blog2003 (1) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Revenue, is from final judgment and Order in Appeal Nos. E-289-293/1988-D, dated January 9, 2001. All these twenty appeals relate to the Assessment Years 1979 to 1986, albeit, for different periods. Civil Appeal No. 5711 of 1999 is filed by the Revenue, dissatisfied by the final judgment and order of the C.E.G.A.T. in Final Order No. 351/99-B in Appeal No. E/2483/1992-B passed on April 6, 1999 and it relates to the Assessment year 1986-87. 2. In the order impugned in the first set of appeals, the Tribunal applied the functional test and classified those thirty two items, manufactured by the assessee, under Tariff Item 52 of the First Schedule to the Central Excise Act, 1944. The classification was based on the finding recorded by the Tribunal, after referring to the findings in the identical case of M/s. Hindustan Motors Limited v. Collector of Central Excise, Calcutta [Tribunal's Order No. E/333/93-D, dated 6th October, 1993 in Appeal No. E/882/85-D]. The finding reads as follows : "... the Tribunal had clearly held that goods, even though used as component parts of motor vehicles having a fastening function primarily, are to be classified under Item 52 C.E.T." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irtually parts of automobile, were classifiable under Tariff Item 68. 6. On the basis of similar findings and following the principle laid down in Purewal Associates Limited (supra), the Tribunal [in the order in question in Civil Appeal No. 5711 of 1999], having regard to the change of scheme of classification of goods under the Central Excise Tariff Act, 1985 held, for the Assessment Year 1986-87, that the said goods were classifiable under Chapter Heading 87.07 and not under Chapter Heading 73.18, as contended by the Revenue. 7. Mr. S. Ganesh, learned senior Counsel appearing for the assessee, contends that inasmuch as the test laid down in Purewal Associates Limited (supra), namely, the test of commercial identity, was not available to the Tribunal when it passed the order, now subject-matter of the first set of appeals, it erred in applying the functional test and holding that the goods in question are classifiable under Tariff Item 52, as it existed prior to the commencement of the Central Excise Tariff Act, 1985 and, therefore, the order of the Tribunal is liable to be set aside. He submits that after having the benefit of the law laid down by this Court in Purew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22) Genuine Nuts; (23) Azle Studs with Nuts; (24) Hub Bolt & Washers; (25) Checknuts; (26) Shaft Bolts; (27) Misc. Bolts; (28) Sprint Shackle Assembly; (29) Gun Metal Bushes; (30) King Pin & King Pin Unit; (31) Fan Blades; and (32) Spring Hanger & Brackets. 11. As the controversy centres round Tariff Items 52 and 68 in the First Schedule of the Central Excise Act, 1944, it will be apt to refer them here. They read as follows : Item No. Description of goods Rate of duty (1) (2) (3) 52. Bolts and nuts, threaded or tapped and screws, of base metal or alloys thereof, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power. Fifteen per cent ad valorem Explanation:- The expression "Bolts and nuts, threaded or tapped and screws" used in this item shall include bolt ends, screw studs, screw studding, self-tapped screws, screw hooks and screw rings. Item No. Description of goods Rate of duty (1) (2) (3) 68. All other goods, not elsewhere specified, but excluding - (a) alcohol, all sorts, including alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics; and (c) dutia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the specified goods mentioned in Tariff Item 34A. 15. The question that needs to be adverted to is: whether the goods in question can appropriately be classified under Tariff Item 52 or not having been specified elsewhere, they fall under Tariff Item 68. In construing these items, what is the proper test to be applied? Is it the functional test or is it commercial identity test which would determine the issue. It seems to us that this question is no longer res integra. It fell for consideration of this Court earlier and it was laid down that the true test for classification was the test of commercial identity and not the functional test. It needs to be ascertained as to how the goods in question are referred to in the market by those who deal with them, be it for the purposes of selling, purchasing or otherwise. 16. In Jaishri Engineering Co. (P) Ltd. v. Collector of Central Excise [1989 (40) E.L.T. 214] this Court considered the question whether High Pressure Connectors meant for lubricating purposes were classifiable under Tariff Item 52 of the Central Excise Tariff as 'nuts' or under Tariff Item 68 as 'integral part of diesel engine pipes'. It was found that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved at by the Tribunal but in the appeal dealing with nuts and bolts as the Tribunal has noted the correct test and properly applied it, there was no reason to interfere with the result which was arrived on the basis of the findings of fact. 19. In interpreting Tariff Item 52, we may usefully refer to Excise Collector's Trade Notice No. 127/71, dated 5th July, 1971. It would be apt to read it here : "Mere existence of threads would not render an article as a bolt, nut or screw if it is recognisable as component part of an instrument, apparatus, appliance or machine. The tariff definition of Item 52 is intended to cover only those which are known as bolt, nuts and screws in the market." 20. From a perusal of the Trade Notice, two aspects become apparent. The first is that mere existence of threads would not render an article as a bolt, nut or screw so long as that is recognisable as component part of an instrument, apparatus, appliance or machine and the second is that the expression used in Tariff Item 52 is intended to cover only those which are known as bolt, nuts and screws in the market. The Trade Notice re-affirms the commercial identity of goods test. Keeping t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 88 to 'parts' or 'accessories' do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those Chapters. A part or accessory which answers to a description in two or more of the headings of those Chapters is to be classified under that heading which corresponds to the principal use of that part of accessory." 24. Section XVII deals with Vehicles, Aircraft, Vessels and Associated Transport Equipment. Note 2 says that the expression "parts" and "parts and accessories" do not apply to the articles mentioned in clauses (a) to (l) thereunder. In clause (b), parts of general use as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39), are mentioned. This takes us to Note 2(a) to Chapter XV, which provides that throughout that Schedule, the expression "parts of general use" means: "(a) Articles of Heading No. 73.07, 73.12, 73.15, 73.17 or 73.18 and similar articles of other base metal; " 25. Note 3 says that references in Chapters 86 to 88 to 'parts' or 'accessories' do not apply to parts or accessories which are not suitable for use solely or primarily with the arti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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