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TMI Blog2007 (4) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... s' of motor vehicles and instead classified it as 'other plastic products' under Chapter 39. FACTS 2.The appellant is a small-scale unit, manufacturing plastic name plates for motor vehicles in accordance with the specifications and designs supplied by the customers, who are the vehicle manufacturers. The entire production of the appellant is sold to the vehicle manufacturers alone. 3.Between 1986 and 1994, the classification lists filed by the appellant claimed the classification of name plates under headings 87.08 and 87.14 and the same were approved by the Department from time to time. On 2-8-1994, a show cause notice was issued by the Assistant Collector of Central Excise, Ambala proposing to re-classify the name plates under heading 39.26 as articles of plastics. The notice was however subsequently dropped and an order-in-original dated 8-11-1994 was passed stating that the appropriate classification of the name plates was under Chapter 87. 4.Subsequently, the Commissioner of Central Excise, New Delhi exercising powers under section 35E of the Act reviewed the above order and filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) by the order dated 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do fall within the scope of 'parts and accessories' of motor vehicles, whether there is any provision in the Explanatory Notes that specifically excludes 'plastic name plates' from headings 87.08 and 87.14? ISSUE NO. 1 11.The first issue that we are required to examine is whether 'plastic name plates' can be considered 'parts and accessories' of motor vehicles. 12.The Tribunal has answered the above question in the negative. Significantly, the Tribunal has only examined whether the name plates can be considered 'parts' of motor vehicles. It has not at all considered whether these name plates can be considered 'accessories' of motor vehicles. The relevant portion of the judgment of the Tribunal is reproduced below : According to Sarkar's 'Words and Phrases of Excise & Customs', Second Edition, part is "an element of a sub-assembly, not normally useful by itself and not amenable to further disassembly for maintenance purpose". In common parlance parts are used in the manufacture of the final product and without which the final product cannot be conceived of. A motor vehicle is a complete vehicle without affixation of emblems or name plates and we agree with the submissions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apter 87 as 'parts' as well as 'accessories' of motor vehicles, we are not examining the former category. Without going into the question of whether name plates fall within the definition of 'parts' of motor vehicles, for the present purpose, we are restricting ourselves only to the interpretation of the broader term, 'accessories'. Thus, regardless of whether name plates can be considered 'parts' of motor vehicles, we are determining whether at the very least, name plates can be considered 'accessories' of motor vehicles. 16.The term 'accessory' is defined in The New Collins Concise Dictionary of the English Language (1982) as "a supplementary part or object, as of a car, appliance, etc". Other definitions for the accessory are found in the Advanced Law Lexicon (3rd edition, 2005) and include the following: "Something of secondary or subordinate importance; Something contributing in subordinate degree to a general result or effect; an adjunct or accompaniment; ... Accessory is an article or device that adds to convenience or effectiveness of, but is not essential to, main machinery." 17.This Court has considered and decided as to what the meaning of the term 'accessory' is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 'articles adapted to use generally as parts and accessories of motor vehicles'. The Court, holding that car seat covers and upholstery were in fact accessories to motor vehicles, observed as follows : "In Black's Law Dictionary, Fifth Edition at p. 13 'accessory' has been defined as "anything which is joined to another thing as an ornament, or to render it more perfect, or which accompanies it, or is connected with it as an incident, or as subordinate to it, or which belongs to or with it, adjunct or accompaniment, a thing of subordinate importance. Aiding or contributing in secondary way of assisting in or contributing to as a subordinate". (Para 3) ... In our view the correct test would be whether the article or articles in question would be an adjunct or an accompaniment or an addition for the convenient use of another part of the vehicle or adds to the beauty, elegance or comfort for the use of the motor vehicle or a supplementary or secondary to the main or primary importance. Whether an article or part is an accessory cannot be decided with reference to its necessity to its effective use of the vehicle as a whole. General adaptability may be relevant but may not by itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value added for the accretion of nameplate was entitled to pro- forma credit in terms of the said notification. It is true that an electric fan may perform its essential functions without affixation of the nameplate, but that is not enough. Electric fans do not become marketable products without affixation of name plates. (Para 9) [Emphasis supplied] 21.It is evident therefore, that an 'accessory' by its very definition is something supplementary or subordinate in nature and need not be essential for the actual functioning of the product. Applying the test laid down in Mehra Bros. case (supra), it cannot be denied that name plates add to the convenient use of the motor vehicle. Name plates serve a very useful purpose inasmuch as it gives an identity to the vehicle. Each vehicle comes with different brand name and in different models having distinct features. The manufacturers of different type of models of vehicles market them under a name and the vehicles are recognized and referred to by the name plate affixed on them. Name plates convey to the consumers the distinct features it carries. Undoubtedly they add effectiveness and value to the vehicle and are at the very least acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planatory Note)." [Emphasis supplied] An almost identical explanation exists under the Notes to heading 87.14. 26.The effect of the above HSN Explanatory Notes is to specifically exclude from the scope of these headings what is excluded in the general notes to the entire Section (Section XVII), of which Chapter 87 is a part. The General Explanatory Note to Section XVII states as follows : Section Notes. ... 2. - The expressions "parts" and "parts and accessories" do not apply to the following articles, whether or not they are identifiable as for the goods of this section :- ... (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) 3.- 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 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 or accessory. [Emphasis supplied] Further explanation regarding Note 2 reads as follows : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t blush, it appears that if the base metal name plates are excluded, so must similar plastic goods be excluded. However, we do not think that this is the correct position, primarily because of the reference made in Note 2(b) to Chapter 39. Undoubtedly, name plates of base metal stand excluded from the scope of Section XVII by virtue of being "parts of general use" as defined and specifically mentioned in Chapter XV. Now, with respect to plastic name plates, if the reference to Chapter 39 had not been made, then there would be no controversy at all. In such a case, all plastic products similar to those defined in Chapter XV would be excluded, regardless of an omission to specifically mention them within Chapter 39. In other words, without any reference to Chapter 39 in Note 2(b), the only control on the meaning of "similar goods of plastics" would be the description of goods included within Chapter XV. 31.However, the minute a reference is made to Chapter 39, it is the provisions in Chapter 39 that control the scope of "similar goods of plastics". Thus, when Note 2(b) refers to similar goods of plastics as in Chapter 39, it must be interpreted to mean similarly defined goods in Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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