2001(06)LCX0022

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri G.R. Sharma, Member (T) and Krishan Kumar, Member (J)

EICHER PRECISION MACHINES LTD.

Versus

COMMISSIONER OF C. EX., NEW DELHI

Final Order No. 293/2001-B, dated 4-6-2001 in Appeal No. E/1397/88-B

Autolec Industries Ltd. v. Commissioner — 2000(03)LCX0299 Eq 2000 (123) ELT 1039 (Tribunal) — Relied on [Para 9]

Commissioner v. Escorts — 1994(05)LCX0073 Eq 1994 (072) ELT 0387 (Tribunal) — Referred............................. [Para 4]

Commissioner v. Halios India (P) Ltd. — 1999(12)LCX0128 Eq 2000 (119) ELT 0172 (Tribunal) — Relied on. [Para 10]

Eureka Forbes Ltd. v. Commissioner — 2000(08)LCX0229 Eq 2000 (120) ELT 0533 (Tribunal) — Referred....... [Para 4]

Inaroo Ltd. v. Commissioner — Referred............................................................................... [Para 2]

Advocated By :   Shri Promod Banthia, C.A., for the Appellant.

Shri Ashok Kumar, JDR, for the Respondents.

[Order per : G.R. Sharma, Member (T)]. - Captioned appeal has been filed against the finding of the Collector (Appeals) holding that “I do not find any ground in the Appellant’s appeal to interfere with the impugned order of the Assistant Collector in this case. The Assistant Collector’s Order-in-Original is accordingly upheld and the appeal of the Appellant fails.”

2. The Assistant Collector in the Order-in-Original had held that “Having regard to the facts and discussion above it is, therefore, held that the P.T.O. pulley manufactured by the Appellant is to be classified under sub-heading 8483.00 ibid. The classification list is modified accordingly. Regarding the party’s contention that the demand is enforceable from the date of issue of show cause notice, in view of the CEGAT order in the case of M/s. Inaroo Limited v. CCE, Bombay, the contention of the party is admitted and the party should pay duty from the date of show cause notice.”

3. The facts of the case in brief are that the Appellants are engaged in the manufacture of P.T.O. pulley assembly and its parts which are used in tractor. Under the old tariff these goods were being classified under TI 68 and were enjoying the benefit under Notification No. 234/82, dated 1-11-1982 as amended as agricultural implements and parts thereof. The Assistant Collector while examining their classification list noticed that the Appellants were classifying their product under Chapter sub-heading 8208.10 of CETA, 1985. With effect from 1-3-1986 when new Central Excise Tariff was introduced, the assessee was issued a SCN asking them as to why PTO pulley should not be classified under sub-heading 8483.00 as against their claim of its classification under Chapter sub-heading 8208.10. The assessee contended that classification of P.T.O. pulley has since been finalised by the then Assistant Collector on 23-9-1985 wherein it has been held that agricultural implement fall under TI 68. The assesssee also contended that in the classification list effective from 1-3-1986 submitted by the assessee has been approved and the product has been classified under Chapter sub-heading 8208.10 giving them exemption under Notification No. 64/86, dated 10-2-1986 as amended. It was explained by the assessee that P.T.O. pulley is a belt pulley and it increases the utility of the tractor for which it is to be used. It was, therefore argued that this P.T.O. pulley was an integral part of the tractor or it could be attached to the tractor separately through a suitable coupling; that the function of the pulley was to reduce the speed of the tractor for running the thrasher/water pump or tubewell, etc. It was pleaded that in case the pulley manufactured by them cannot be classified under Chapter sub-heading 8208.10 it can be classified under Heading 8708.00 as part of an accessory of a tractor. It was argued that P.T.O. pulley manufactured by the assessee is an accessory of Eicher tractor; that Note I(00k) of Section XVII makes it clear that Section XVII does not cover articles of Section XVI; that since parts and accessories of a tractor are covered under Heading 8708.00, P.T.O. pulley being an accessory of a tractor may be classified under sub-heading 8708.00. The matter was examined first by the Assistant Collector and subsequently by the Commissioner (Appeals) and the Commissioner (Appeals) approved the classification under Chapter sub-heading 8483.00 and hence the appeal before us.

4. Arguing the case, Shri Promod Banthia, Chartered Accountant for the Appellant submits that P.T.O. pulley manufactured by them is part of tractor. He submits that if it cannot be considered as part of the tractor then it is an accessory of the tractor. He submits that the use of the P.T.O. pulley in conjunction with the tractor clearly shows that it is either a part or an accessory. He, therefore, submits that classification of P.T.O. pulley should be under Chapter Heading 87.08. He submits that P.T.O. pulley is distinct from ordinary pulley. He submits that a look at P.T.O. pulley would convince anyone that P.T.O. pulley is a part/accessory of a tractor. He refers to the decision of this Tribunal in the case of CCE v. Escorts reported in 1994 (072) ELT 387, wherein this Tribunal held that gears and shafts are parts of tractors as they are principally used in tractors; that no other use of these parts has been brought on record; that since the goods in question are undisputedly not integral part of engines or motors, the net effect is that expression parts and parts and accessories appearing under Section XVII would apply to such articles; that therefore the goods in question are to be taken as covered by Section XVII and being so they are automatically excluded from the purview of Section XVI and hence from the view of Tariff Heading No. 84.83. Ld. CA submits that P.T.O. pulley assembly in their case is exactly on the same footing as gears and shafts and, therefore they are to be classified under Chapter Heading 87.08. He also refers to the decision of this Tribunal in the case of Eureka Forbes Limited v. CCE reported in 2000 (120) ELT 533 and submits that this Tribunal held that an object or device which adds to the effectiveness of something else cannot be considered to be an integral part of the equipment but it can only be an accessory. He submits that P.T.O. pulley assembly in their case is an accessory because it adds to effectiveness of the tractor.

5. Ld. CA submits that according to the Rules of Interpretation the item merits classification under Chapter Heading 87.08 because it is an accessory to a tractor; that according to the Note (3) under Section XVII since use of P.T.O. pulley is originally with the tractor its correct classification should be under Chapter Heading 87.08; that Section XVII covers tractors, part and accessories of tractor and these items are excluded from Chapter 84 (Section XVI); that P.T.O. pulley assembly is not sold by the dealer dealing in machine, mechanical appliances and hardware. Ld. CA submits that P.T.O. pulley manufactured by the Appellant is part and accessory of a tractor and, therefore should be classified under Chapter Heading 87.08.

6. Shri Ashok Kumar, ld. JDR, submits that Heading 8208.10 during the relevant time reads tools and implements of a kind used in agriculture. He submits that Heading 8483 reads - - - - - - - - - flywheels and pulleys, including pulley blocks.

7. Ld. JDR submits that the scope of Chapter 82 under which the assessee had claimed classification of P.T.O. pulley covers only such implements which are a blade, working edge, working surface or other working part like base metal and metal carbides or cermets, etc. He submits that it is quite clear that PTO pulley assembly is precluded from getting classified under Chapter sub-heading 8208.10.

8. Ld. JDR submits that Heading 8483.00 clearly mentions pulley including pulley blocks. In the instant case pulley and belt which is used in the tractor to increase utility of the tractor or agricultural operation itself does not lead to conclusion that belt and pulley attachment is agricultural implement. Ld. JDR submits that going by the Rules of Interpretation of tariff a specific entry description shall have precedence over the heading providing more general description. He submits that P.T.O. pulley is a belt and pulley finding specific mention under Chapter sub-heading 8483.00. He submits that alternative plea of the assessee that the product may merit classification under sub-heading 8708.00 shows clearly that sub-heading 8208.10 does not cover the product manufactured by the assessee. He submits that for the purpose of belt pulley and its blocks, heading 8708.00 is also not specific. Ld. DR therefore submits that P.T.O. pulley manufactured by the Appellants is classifiable under sub-heading 8483.00.

9.  Ld. DR further submits that this Tribunal in the case of Autolec Industries Limited [2000(003)LCX0299 Eq 2000 (123) ELT 1039] held that shafts and pulleys for water pump used to transmit motive power from IC engine to impeller of water pump chamber are classifiable under Heading 84.83. He submits that in the case of P.T.O. pulley also it is used to transmit motive power from the tractor to water pump or thrasher and, therefore Heading 8483 is correct heading for P.T.O. pulley.

10. Ld. DR also refers to the judgment of this Tribunal in the case of CCE v. Halios India (P) Limited reported in 2000 (119) ELT 172, wherein this Tribunal held that transmission shaft system and shaft and toothed wheel attached to transmit rotary power generated by prime mover to second toothed wheel housed separately in pump chamber is classifiable under Chapter sub-heading 8483.00. Ld. DR submits that P.T.O. pulley manufactured by the Appellant is also for the purpose of converting high RPM into lower RPM is classifiable under Chapter sub-heading 8483.00. He, therefore, prays that the impugned order may be upheld and the appeal may be rejected.

11. We have heard the rival submissions and perused the case law. The item manufactured by the Appellant is belt pulley used in the tractor. We have examined the Chapter sub-headings 8208.10 and 8708.00. We note that the case law cited and relied upon by the ld. DR is clearly applicable to the facts of the present case in supporting the view that the goods manufactured by the Appellant are classifiable under Chapter sub-heading 8483.00. We note that the claim of the Appellant was first for classification of their product under Chapter sub-heading 8208.10. We find that this heading does not specifically make mention of P.T.O. pulley, belt pulley, etc. We have also perused the Rules of Interpretation as also the section notes. Alternative plea of the Appellant that the product is tractor parts and accessories and, therefore should be classified under Chapter sub-heading 8708.00 is not tenable inasmuch as there is no specific mention of this particular item. We have examined the description of the goods falling under Chapter sub-heading 8483.00. We find that there is specific mention of pulley and pulley blocks. This is well settled principle of interpretation or classification of goods that a specific heading must be given precedence over the general heading. Going by this Rule of Interpretation, we find that there is specific mention of pulley and pulley blocks against Chapter sub-heading 8483.00, therefore we hold that P.T.O. pulley; manufactured by the assessee is classifiable under Chapter sub-heading 8483.00. In this view of the matter, we do not find any reason to interfere with the finding of the authorities below. In the circumstances, the impugned order is upheld and the appeal is rejected.

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Equivalent 2001 (131) ELT 600 (Tri. - Del.)

Equivalent 2001 (045) RLT 0761