2007(03)LCX0057

In the Customs, Excise & Service Tax Appellate Tribunal, Chennai

Shri P.G. Chacko, Member (Judicial) and Shri P. Karthikeyan, Member (Technical)

Godrej Hi-Care Ltd.

Versus

Commissioner of Customs, Chennai

Final Order No. 316/2007 dt. 29.3.2007 certified on 2.4.2007 in Appeal No. C/355/2000

Cases Quoted -

CCE, Bangalore vs. Mysore Electricals Industries 2006(11)LCX0010 Eq 2007 (078) RLT 0012 (SC) - Not followed [para4]

CCE, Hyderabad vs. Kalpana Chemicals Ltd. 2006(03)LCX0025 Eq 2006 (074) RLT 0447 (SC)-Followed [para4]

ITW Signode India Ltd. vs. Collector 2003 (059) RLT 0477 (SC)-Referred [para4]

Advocated By -

Shri Mohd. Ismail, Adv. for Appellant
Shri Vasa Seshagiri Rao, SDR for Respondent

Per P.G. Chacko :

The appellants had imported goods declared as "PTC Thermistors" and classified under Heading 85.33 of the First Schedule to the Customs Tariff Act, and cleared the same on payment of duty as applicable to the said classification. Subsequently, show-cause notices were issued to them by the department proposing to classify the above goods under SH 8516.90 as parts of heaters for diffusing insecticides and demanding differential duty. This demand of duty was contested. In adjudication of the dispute, the original authority upheld the classification of the item under SH 8516.90 and confirmed the demand of differential duty. In appeal, learned Commissioner (Appeals) upheld the above classification and demand. Hence the present appeal.


2. After examining the records, we find that the goods were assessed to duty under SH 8533.39 as claimed by the assessee at the time of clearance. Before the original authority and the first appellate authority, the assessee contended that the item was specifically covered under SH 8533.40. In this connection, they relied on ITC (HS) Classification also. The proposal to classify the goods under SH 8516.90 as part of electric insecticide diffusers was opposed on the strength of Note 2 (a) of Section XVI of the Customs Tariff Schedule. The authorities, however, overruled this objection and held the goods to be classifiable under SH 8516.90.


3. We find that, admittedly, the item was described in the manufacturer's catalogue as "Thermistor for insecticide electric diffusers". The catalogue described it as under:-

"This unit is a plastic housing device with a hole in the center to heat the standard wick thanks to the PTC thermistor placed inside, whose characteristic is to increase its resistance when a specific temperature is reached. The unit with a quite constant surface temperature over a wide range of voltages."

It is also found that Heading 85.16 of the Tariff Schedule includes "electric heating resistors other than those of Heading No. 85.45." Parts of such goods would fall under SH 8516.90. It is not the case of the appellants that the Thermistors imported by them were not to be used as parts of heaters for diffusing insecticides. Explanatory Notes to HSN Heading 85.16 indicate that perfumes/incense heaters and heaters for diffusing insecticides are covered under Heading 85.16 only. Learned counsel relied on Section Note 2 (a), whereas learned SDR relied on Section Note 2 (b). We find that the lower authorities have correctly dealt with this dispute. The original authority held as under:-

Classification under 8533.40 would have been relevant if what was imported was just a thermistor and nothing else. The imported goods as explained in para above, are heaters for electric insecticide diffusers rather than mere thermistors. In view of this, the products namely MK05 Godrej and MK09 Godrej go out of the purview of Section Note 2 (a). They are correctly covered within the ambit of Section Note 2 (b) of Section XVI of Customs Tariff, which states "parts if suitable for use solely or principally with a particular kind of machine or with number of machines of the same headings are to be classified with the machines of that kind"

We uphold the above decision of the lower authorities and confirm classification of the goods under SH 8516.90.


4. Learned counsel relied on the apex court's judgment in Commissioner of Central Excise, Bangalore Vs. Mysore Electricals Industries Ltd., 2006(11)LCX0010 Eq 2007 (078) RLT 0012 (SC)=2006(11)LCX0010 Eq 2006 (204) ELT 0517 (SC) in support of his submission that duty could not be demanded for any period prior to the date of re-classification of the goods under SH 8516.90. Learned SDR countered by relying on the Hon'ble Supreme Court's judgment in Commissioner of Central Excise, Hyderabad Vs. Kalpana Chemicals Ltd., 2006(03)LCX0025 Eq 2006 (074) RLT 0447 (SC)=2006(03)LCX0025 Eq 2006 (197) ELT 0319 (SC). We find that, in the case of Kalpana Chemicals (supra), a Bench of three judges of the Hon'ble Supreme Court relied on FTW Signode India Ltd. Vs. Collector, 2003 (059) RLT 0477 (SC)=2003(11)LCX0238 Eq 2003 (158) ELT 0403 (SC) and held to the effect that it was open to the department to demand duty from an assessee under revised classification of the goods for a period of 6 months prior to the date of revision of classification. It is seen that a contra view was taken in the case of Mysore Electricals (supra) by a Bench of two judges of the Hon'ble Supreme Court. We have to follow the view taken by the Larger Bench of the apex court. Accordingly, it is held that differential duty as applicable to classification of the goods under SH 8516.90 was correctly demanded in this case.


5. The impugned order is sustained and this appeal is dismissed. Operative part of the order pronounced in open Court on 29.3.2007.

Equivalent 2007 (080) RLT 0555 (CESTAT-Che.)

Equivalent 2007 (214) ELT 0098 (Tri.- Chennai)