Elefur Industries (India) Pvt. Ltd. vs Collector of Central Excise>1992(08)LCX0028

1992(08)LCX0028

BEFORE THE CEGAT, SPECIAL BENCH ‘D’, NEW DELHI

S/Shri K.S. Venkataramani, Member (T) and S.L. Peeran, Member (J)

ELEFUR INDUSTRIES (INDIA) PVT. LTD.

Versus

COLLECTOR OF CENTRAL EXCISE

Order No. E/339/92-D, dated 17-8-92 in Appeal E/No. 4960/91 -D

Cases Quoted

Collector v. Bengal Chemicals & Pharmaceuticals — 1990(02)LCX0080 Eq 1990 (047) ELT 0374 (TRIBUNAL) . [Para 2]

Collector v. Frozen Foods — 1991(12)LCX0011 Eq 1992 (059) ELT 0279 (Tribunal) .............................................. [Para 2]

Dunlop India v. U.O.I. — 1983 (13) E.L.T 1566 (S.C.)......................................................... [Para 2]

Elson Machines v. Collector — 1988(11)LCX0035 Eq 1988 (038) ELT 0571 (S.C.)................................................... [Para 3]

Madras Radiators & Pressings v. Collector — 1989(06)LCX0025 Eq 1989 (044) ELT 0247 (Tribunal)................... [Para 3]

Rainbow Ink & Varnish Mfg. Co. v. Collector — 1991(11)LCX0043 Eq 1992 (059) ELT 0593 (Tribunal)............... [Para 2]

Rohit Pulp & Paper Mills v. Collector — 1990(04)LCX0074 Eq 1990 (047) ELT 0491 (S.C.)................................... [Para 4]

Tamil Nadu Newsprint & Papers v. Appraiser — 1987(09)LCX0004 Eq 1988 (033) ELT 0022 (Mad.)................... [Para 2]

Advocated By : Shri Jitender Singh, Advocate, for the Appellants.

Smt. J.M.S. Sundaram, SDR, for the Respondents.

[Order per : K.S. Venkataramani, Member (T)]. - The appellants herein are engaged in the manufacture of steel furniture. They filed two classification lists No. 76/90-91 and 24/90-91 in which they classified filing cabinets under sub-heading 8304.00 CETA 1985 which reads as follows :

“8304.00 - Filing cabinets, card index cabinets, paper trays, paper rests, pen trays, office stamp stand and similar office or desk equipments of base metal other than office furniture of Heading No. 94.03.”

They classified tool boxes under sub-heading 7326.90 of which the relevant portion reads :

“73.26 - Other articles of iron and steel”

“7326.90 - Other”

The Assistant Collector of Central Excise, Divn. V. Vadodara, issued show cause notice proposing to classify the filing cabinets and tool boxes under sub-heading 9403.00 which covers “Other furniture and parts thereof. “On considering the reply thereto, the Assistant Collector found from the catalogue of the product that the filing cabinets are designed for placement on the floor. He applied Chapter Note 2 to Chapter 94 CETA which says that the articles referred to in Headings 94.01 to 94.03 are to be classified in those headings only if they are designed for placing on the ground/floor and hence the Assistant Collector classified filing cabinets under sub-heading 9403.00 CETA. He also noted that Tariff Heading 83.04 contains an exclusion of office furniture of Heading 94.03 and that the filing cabinets, being such furniture were hit by such exclusion in the tariff heading itself. In respect of tool boxes, the Assistant Collector examined the technical drawing of the tool box furnished by the appellants and concluded, therefrom, that the tool box is actually a front opening metal cupboard with shelves and hanging rod, and, as such was only an item of furniture. It was also noted by the Assistant Collector that the Section Note 1(k) to Section XV of CETA (under which Chapter 73 falls) said that the Section does not cover articles of Chapter 94, e.g., furniture. Hence, tool boxes were also classified under sub-heading 9403.00 by the Assistant Collector and he approved the classification lists accordingly. This order of the Assistant Collector dated 29-1-91, was challenged in appeal and the Collector of Central Excise (Appeals), Bombay, by his impugned orders, issued on 22-10-1991, rejected the appeal.

2. The ld. Counsel Shri. Jitender Singh, appearing for the appellants, contended that the lower authorities in their orders, had relied upon the Explanatory Notes to Harmonised System of Nomenclature (HSN) for classification which was not permissible and the ld. Counsel pointed out that when the Tariff Heading 83.04 specifically included filing cabinets, there was no need to have recourse to Rules of Interpretation of Tariff or to HSN. The ld. Counsel argued that it is also well-settled that when the Tariff contained an entry specific for the goods in question, that is to be preferred to any other more general heading. In this context, the ld. Counsel relied upon the case law reported in 1990(02)LCX0080 Eq 1990 (047) ELT 0374 (T) Collector of Customs v. Bengal Chemicals & Pharmaceuticals; 1991(12)LCX0011 Eq 1992 (059) ELT 0279 (T), Collector of Central Excise v. Frozen Foods; 1975(10)LCX0016 Eq 1983 (013) ELT 1566 (S.C.), Dunlop India v. Union of India; and 1987(09)LCX0004 Eq 1988 (033) ELT 0022 (Madras) - Tamil Nadu Newsprint & Papers v. Appraiser. As regards the classification of tool boxes, it was urged that the Assistant Collector and Collector had not seen the tool boxes but had decided the classification only on the basis of technical drawing. It was explained that tool boxes are not items of furniture. The ld. Counsel, in this context, referred to the Explanatory Notes to HSN under Chapter 73 to say that tool boxes are included therein. At any rate, the ld. Counsel urged any change in classification can only have prospective effect from the date of such approval for which he relied upon Tribunal’s decision in the case of Rainbow Ink & Varnish Mfg. Co. v. Collector of Central Excise -1992 (059) ELT 593.

3. Smt. Shanti Sundaram, ld. SDR, submitted that the description of the goods, as filing cabinets and tool boxes, in Assistant Collector’s order, is not disputed by the appellants. It was contended that the classification of filing cabinet has been done only with reference to the coverage of tariff heading, chapter and Section Notes and the Explanatory Notes to HSN have not been invoked. According to the ld. SDR, Heading 83.04 is specific only to such filing cabinets as do not fall under Chapter 94 and when it is found that the filing cabinets in question, are thus designed to be placed on the floor, they are covered by Heading 94.03 by virtue of Chapter Note 2 of Chapter 94. The ld. SDR cited the Tribunal’s decision in the case of Madras Radiators Pressings v. Collector of Central Excise -1989 (044) ELT 247 and submitted that the decision discussed the criteria as to what would constitute furniture and applying these criteria also, the filing cabinets are only items of furniture for general use. As regards tool boxes, the Assistant Collector, on examination of the technical drawing, has found that the goods are only cupboards with front opening. They were not boxes with lids. The goods are cupboards for tools and such items fall under Heading 94.03 as per Explanatory Notes to HSN. The Department was right in relying upon the technical drawing as it is the appellants’ own document. The ld. SDR also relied upon Supreme Court decisions in the case of Elson Machines v. Collector of Central Excise -1988 (038) ELT 571 to say that Department can modify classification retrospectively, but in the present case, is not one of modification of an approved classification list but approval of fresh classification list filed by appellants and as such the case law cited by the appellants has no relevance.

4. The submissions made by both the parties have been carefully considered. Taking up the classification of filing cabinet, it is no doubt true that filing cabinets are specifically mentioned in Heading 83.04 which has been extracted supra. But a reading of the heading as a whole shows that filing cabinets find mention therein along with other items such as paper trays, pen trays and “similar office or desk equipment, of base metal, other than office furniture of Heading 94.03". Therefore, filing cabinets of that heading should be in the nature of office or desk equipment and should be other than office furniture of Heading 94.03. It is evident from Chapter Note 2 of Chapter 94 that the furniture under Heading 94.03 should be such as are designed to be placed on the ground/floor which again will not be those of Heading 83.04 which, as has been seen, are office or desk equipment. The catalogue of the filing cabinets, in question, also showed that these are designed to be placed on the ground and hence are not desk or office equipment. Further, applying the principle of NOSCITUR A SOCIIS in reading the tariff heading, the same conclusion that the filing cabinets in question, are not those covered by Heading 83.04 would follow. This principle means that the meaning of a word is to be judged by the company it keeps which was lucidly brought out in the Supreme Court decision in the case of Rohit Pulp and Paper Mills v. Collector of Central Excise -1990 (047) ELT 491. Therefore, considering that the other items in the Heading 84.03 along with filing cabinets are of a type which are in the nature of desk equipments, and also having regard to the exclusion of office furniture of Heading 94.03 in Heading 84.03 itself, it is held that filing cabinets in question, have been rightly classified under Heading 94.03 CETA in the light of Chapter Note 2 of the Chapter 94, and having regard to its design as reflected in the appellants’ catalogue for the product.

5. In respect of the tool boxes, the classification list has been submitted for toolbox of style 1140. On a perusal of the technical drawing of the goods, the Assistant Collector has observed that what the appellants call tool box is actually a cupboard made of metal. “Its base is of the same type as the innumerable number of wardrobes and cabinets manufactured by M/s. Elefur Industries (India) Ltd. It is front opening, with latches and has shelves on the right hand side and hanging rod on the left. It is two storeys arrangement the top and the bottom parts being identical. The item clearly is not a box but more in the nature of cupboard for keeping items which may be tools or otherwise”. The appellants have not controverted these findings on the constructional features of the product at any stage and the technical drawing and catalogue are not on record. It is evident, therefrom, that the goods are having similar design as a cupboard with doors and shelves and hanging rod with a base for placement on the floor. Nothing has been shown by the appellants to indicate whether the tool boxes have any special features for use only in workshops. Cupboards, which could be used for storing tools in workshops also find mention in the HSN Explanatory Notes to Heading 94.03 indicating classification of such cupboards under that heading. It is well settled that HSN Explanatory Notes, though not having statutory force, nevertheless, provide a useful guide, and have persuasive value, as CETA largely follows HSN classification. Further, once the tool boxes are seen to be in the nature of furniture as cupboards, they stand excluded from Chapter 73 by virture of Section Note 1(K) to Section XV (under which Chapter 73 occurs). This Section Note reads as follows :

“1(K) - This Section does not cover articles of Chapter 94 (for example furniture, mattresses supports, lamps and lighting fittings......”

It is also not possible to accept the argument that the lower authorities should not have gone by the technical drawing because it is appellants’ own document relating to the very type of toot box style 1140 of which classification was sought. It is, further, found that this is not a case of the Department seeking to modify an already approved classification but SCN has been issued on their filing classification list asking them why the goods be not classified under 94.03 for the reasons stated in the SCN. Hence, the case law cited in respect of modification of approved classification list, are not quite apt to the appellants situation. In the result, there is no reason to interfere with classification of the goods as done by the lower authorities and the appeal is, therefore, rejected.

Equivalent 1993 (63) ELT 108 (Tribunal)