1993(09)LCX0072
BEFORE THE COLLECTOR OF CUSTOMS & CENTRAL EXCISE (APPEALS)
Shri D. Jeyaseelan
In re : BEMCO EMERY STONES (P) LTD.
Order-in-Appeal No. 79/93, dated 27-9-1993
CASE CITED
Shri Vishvakarma (Emery Stones) Industries Pvt. Ltd. v. Collector — 1992(11)LCX0049 Eq 1993 (065) ELT 0044 (Tribunal) [Paras 2, 3]
Advocated By : Shri C.D. Puranik, Advocate, for the Appellant.
[Order]. - The facts of the case in brief are that M/s. Bemco Emery Stones (P) Ltd., Belgaum have classified the goods viz. Emery Stones under Chapter sub-heading 8437 of the Schedule to Central Excise Tariff Act, 1985 and claimed exemption under Notification 175/86-C.E., dated 1-3-1986 as amended as they are small scale unit and cleared the goods under Notification 111/88-C.E., dated 1-3-1988 as amended without payment of duty. It was observed that the appellant’s product i.e. Emery stones is rightly classifiable under Chapter sub-heading 6801.90 which makes the appellant ineligible for the benefit of Notification 111/88-C.E. as amended. Hence, a show cause notice dated 24-9-1991 was issued to the appellant asking them to show cause to the Assistant Collector of Central Excise, Belgaum, as to why their product i.e. emery stones classified under Chapter sub-heading 8437 should not be reclassified under Chapter sub-heading 6801.90 and why the duty of Rs. 23,547.04 (Rs. 22,425.75 BED and Rs, 1,121.29 SED) in respect of the goods valued at Rs. 4,48,515 /- cleared under Gate Pass I Nos. 698 to 780 during the month of March 1991 without payment of duty should not be demanded from the appellant under Section 11A of Central Excises and Salt Act, 1944. The Assistant Collector after following the adjudication proceedings reclassified the goods under Chapter sub-heading 6801.90, and confirmed the demand for Rs. 23,547.04 under Section 11A of Central Excises and Salt Act, 1944 and also imposed a penalty of Rs. 7,500/- on the appellant under Rule 173Q of Central Excise Rules, 1944. Against this order the appeal was filed by the appellant which was remanded for de novo adjudication. As a result, the present appeal has been filed.
2. Sri C.D. Puranik, Advocate appeared for personal hearing on behalf of the appellant. He reiterated the contentions made in the appeal memorandum. He drew my attention to the Tribunal’s decision reported in 1992(11)LCX0049 Eq 1993 (065) ELT 0044 (Tribunal) and produced photographs of the product.
3. I have gone through the appeal. I have carefully examined the description and functions of the product and the relevant photographs. The issue for decision is whether the appellant’s product emery stones are to be classified under Chapter Heading No. 8437 as part of the flour mill machinery or under 6801 as mill stone, grind stones, grinding wheels etc. The Assistant Collector has classified the subject goods under 6801.90 making the appellant ineligible for the benefit of the exemption Notification 111/88 which applies to parts of machine/machinery used in milling industry. On examination of the two persons in the trade and also the trade nomenclature and in the context of the Rules of Interpretation, he has held that the subject goods should be classified under Chapter 68. The appellant has contested that there is a steel ring affixed on the emery stone and they are emery stones, whereas the Assistant Collector has held that notwithstanding the steel ring band around the grinding stone, they have to be considered as a product without frame work. The Assistant Collector has merely relied upon the version of 2 persons viz. Sri V.S. Dhamangi and L.M. Lad. The depositions of these two persons, on careful examination, show that the evidence is not conclusive. They have answered that the actual structure is known as ring and the emery stone can be manufactured without ring and while some could be with ring, others could be without rings and on a query by the appellant, they have confirmed that the ring inside and the iron plate fitted on top of emery stone made of cast iron which is a plate can be called frame works. This being the position, the conclusion of the Assistant Collector appears to be not correct. The flour mill stones fitted with cast iron frame is identifiable as part of the milling machinery as clarified by the CBEC Letter F. No. 151/5/91.CX. 4, dated 20-10-1992 and also held as correctly applied in the Tribunal’s decision 1993 (065) ELT 44 which applies squarely to the facts of this case. The HSN Explanatory Notes at page 900 Vol III also indicate that such stones will not fall under Item 68 but would be classifiable under Chapter 84. The appellant’s products admittedly are used in the milling industry for milling grains. The literature relating to mill stones produced show they are used in flour mills only and meant for power operation. The interpretation that in the absence of any cast iron plate fitted outside the emery stone the subject product has to be considered as emery stone without frame work is far-fetched. There is no technical opinion in support of the Assistant Collector’s version, other than the version of 2 individuals which is also not conclusive.
4. So far as the trade nomenclature is concerned it is well settled that the trade nomenclature cannot be the sole criterion for guiding classification matters. Only when the tariff description is inadequate or in doubt, such recourse is called for. Here, there is no such situatiopn as the tariff description for [Chapter] 84 and 68 are very clear. In any event, the invoices which I have seen (for e.g.) No. E0596 dated 12-3-1991 of the appellant Company shows that these are all emery stones only falling under 84.37. The Rules of Interpretation also will not apply in the context of the item being a part of flour mill machinery under 84.37 and in the context of the relevant Chapter Notes. Apparently, there was no need to have a recourse to Rules of Interpretation of the Schedule in the above circumstances. Notification 111/88 as amended is quite clear that parts of machines falling under 84.37 are exempt under which the appellant’s product is rightly eligible for exemption.
5. In the circumstances, the appeal succeeds. In view of the above findings, I do not consider it necessary to look into other aspects raised by the appellant. Accordingly, the order of the Assistant Collector is set aside and appeal allowed.
Equivalent 1993 (068) ELT 0926 (Coll. Appl.)