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TMI Blog2009 (2) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... e revenue. Since they arise out of the same order-in-original, they are being decided through a common order. 2. The brief facts of the case are that the assessee M/s. Bullows Paint Equipment Pvt. Ltd. filed classification declaration for the years 1995-96 to 1999-2000 as required under Rule 173(b) of the Central Excise Rules, 1944 claiming classification of their produce as under: S. No. Name of the product Chapter Heading No. 1. Spray painting booth 8479.19 2. Paint circulating system 8479.19/8479.90 3. Parts of paint circulating system 8479.19/8479.90 4. Air filter 8421.10 5. Paint filter 8421.10 6. Parts of air/paint filter 8421.10 7. Air motor 8412.10 8. Paint circulating pump 8414.80 9. Parts of Paint circulating pump 8414.99/8414.90 10. Parts of air motor 8412.90 Show cause notice was issued on 20-7-2000 proposing a change in the classification claim. It was alleged in the show cause notice that products namely spray painting booth, paint circulating system, air filter, paint filter, air motor and paint circulating pump had collective function of spraying liquid i.e. paints and form together a mechanical appliances for spraying liquids and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. No. 1, 2 and 3 in para 2 of this order viz, spray painting booth, paint circulating system and parts of paint circulating system are classifiable under Chapter Heading 8424.10 as held by the Dy. Commissioner. However, with reference to items mentioned at S. No. 4 to 10 Commissioner (Appeals) accepted the assessee's claim that they are all having clear distinct individual identity of their own at the point of clearance from their factory gate and as such they were correctly classified by the assessee in the classification list under dispute. He reduced the penalty from Rs. 168 lakhs to Rs. 8,72,728/- which is 25% of the irregular availment of Modvat credit by the assessee's customer in respect of product listed at S. No. 1, 2 & 3 of Para 2 above. 4. Appeals have been filed both by the assessee and the revenue. While the assessee has disputed the classification in respect of products at S. Nos. 1, 2 and 3 sustained by the Commissioner (Appeals) and imposition of penalty thereon, the revenue is disputing the classification accepted by the Commissioner (Appeals) in respect of products listed at S. Nos. 4 to 10 in Para 2 above as well as reduction of penalty. 5. We shall take up t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Packaging Co. Ltd. v. Collector - 1995 (75) E.L.T. 313 (Tribunal). In the present case the goods under reference are correctly classifiable under chapter Heading 84.79 in view of Note 7 to Chapter 84 of the Central Excise Tariff Act, 1985. Further, Rule 2(a) and General Interpretation Rules applies to incomplete and unfinished goods. Neither the show cause notice nor the order passed by the Dy. Commissioner described the goods under reference as incomplete or unfinished goods. The goods under reference are fully manufactured and finished goods and perform its function on their own without further subjecting to any process. Rule 3(a) is also not applicable as the goods in question do not perform the function of spraying and dispersing paints. They cannot be considered as parts of components of appliances of Heading 8424.10 classifiable under sub-heading 8424.80, because they themselves constitute articles covered by Chapter 84 and hence they, in all cases, are classifiable in their own appropriate heading, which is sub-heading 84.79. The parts of paint circulating system will be classifiable under Chapter Heading 8479.90 as there is specific heading for parts in that chapter heading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be projected. They are fitted with triggers or other valves for controlling the flow through the nozzle, which is usually adjustable to give a jet or more or less divergent spray. In the present case, the paint for spraying comes from reservoir or tank through the paint circulating system and its parts and therefore a paint circulating system has to be considered as a part of mechanical appliance for dispersing paint and therefore classifiable under Chapter Heading 8424 as a mechanical spraying appliance for spraying liquid. Same will be the case with spray painting booth where actual painting is carried out by placing an article on the platform provided therein. Similarly parts of paint circulating system will be classifiable under Chapter Heading 8424.99 which relates to parts of goods other than those covered by Heading 8424.10. 9. On limitation, it was submitted that though the description on the invoice was correct, the Chapter Heading was wrongly mentioned to enable the customers to avail of the Modvat credit and therefore penalty has been rightly imposed under Rule 173Q(bbb). 10. We have considered the submissions. We find that spray painting booth is not an essential it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and on which no objection was taken by the department for five years though they have changed the earlier classification. Therefore, in no case a penalty can bee imposed. As regards appeals filed by the General Manager, since no offence has been established against the assessee itself, the question of imposition of any penalty on the General Manager does not arise. The appeals are thus allowed and Commissioner (Appeals) order relating to classification of product at Serial No. 1, 2 and 3 set aside. 11. Revenues Appeals (Appeal No. 2293/01 386/02) : The revenue in its appeals has mainly contended that all the items in question under Serial No. 4 to 10 of the list at para 2 are parts and components of machine system, and in view of Note 2(b) of Section XVI, are correctly classifiable under chapter, sub-heading 8424.00 as spare parts of spray painting machine system. Reference was invited to the Tribunal decision in the case of Becton Dickinson - 1998 (103) E.L.T. 177 (Tri), wherein the Tribunal has held that in matters of classification of goods, the cardinal rule is that a specific overrides the generic. The name given to the product is not relevant for classification but the actua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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