2000(01)LCX0230

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri S.S. Kang, Member (J) and V.K. Agrawal, Member (T)

COMMR. OF C. EX., PUNE

Versus

DECCAN MECHANICAL & CHEMICAL INDUS.

Final Order No.124/2000-B, dated 20-1-2000 in Appeal No.E/3334/93-B

CASE CITED

Cotspun Ltd. — 1999 (113) ELT 353 — Relied on                                                                                  [Para 4]

Advocated By : Shri Ashok Kumar, JDR, for the Appellant.

Shri K. Kumar, Advocate, for the Respondents.

[Order per : S.S. Kang, Member (J)]. – The Revenue filed this appeal against the order-in-appeal, dated 9-4-1992 passed by the Collector of Central Excise (Appeals). In the impugned order, the Collector of Central Excise held that chain conveyor without drive is classifiable under heading 8428.

2.  Brief facts of the case are that the respondents are engaged in the manufacture of chain conveyors and during the period from 1-9-1990 to 30-9-1990, the respondents cleared the goods, in question, without drive after filing the classification list. The respondents claimed the classification under heading 8428 of the Central Excise Tariff as conveyors. The classification list was approved and thereafter a show cause notice dated 27-3-1991 was issued to the respondents for classifying the chain conveyors without drive under tariff sub-heading 8431 as parts of conveyors and differential duty was demanded. The adjudicating authority confirmed the demand and classified the chain conveyors without drive as parts of conveyor under sub-heading 8431. The respondents filed the appeal and vide impugned order the appeal was allowed.

3. Ld. D.R., appearing on behalf of the Revenue, submits that the Collector of Central Excise (Appeals) erred in holding that the product, manufactured by the assessee, is chain conveyor even if it is supplied without an electric motor. The chain conveyor without drive is a circular chain only and it cannot be called a conveyor and this circular chain can function only as part of the conveyor, therefore, is rightly classifiable under heading 8431 of Central Excise Tariff.

4. Ld. Counsel, appearing, on behalf of the respondents, submits that whole of the demand is time-barred. He submits that respondents filed a classification list classifying the product under heading 8428 of the Central Excise Tariff, which was duly approved. He submits that thereafter a show cause notice was issued on 27-3-1991 for reclassification of the product, in question, under a different heading. He submits that duty is being demanded for the period 1-9-1990 to 30-9-1990. He submits that if on merits the case of the revenue is admitted, then as per the decision of the Hon’ble Supreme Court in the case of Cotspun Ltd. reported in 1999 (113) ELT 353 the duty can be demanded only from the date of re-classification of the goods.

5.  On merits, he submits that the respondents are clearing chain conveyors. He submits that even without any drive or electric motor, the chain conveyor is conveyor. He submits that a driving unit is only the motive force or starting device to make an equipment or a machinery to do its job and as such the motive force or starting device can be provided in any form. An equipment which has an ability and capacity to convey material, would be termed as conveyor whether motive force or starting device is attached to it or otherwise. He, therefore, prays that the appeal be dismissed.

6. Heard both sides.

7. In this case the respondents filed the classification list in respect of chain conveyor without drive and classified under heading 8428 of the Central Excise Tariff. The classification was approved. This fact is not disputed by the Revenue. Thereafter, on 27-3-1991 a show cause notice was issued for the period 1-9-1990 to 30-9-1990 for classifying the chain conveyor without drive under heading 8431 of the Central Excise Tariff. The Hon’ble Supreme Court in the case of Cotspun Ltd. (supra) held that the duty can be demanded only from the date of re-classification of the goods.

8. In view of the above decision of the Hon’ble Supreme Court, we hold that the demand is time-barred.

9.  Even on merit, the respondents were clearing the chain conveyors without any motor. The HSN Explanatory Notes at page 1298, Chapter 84.28 describes that conveyors are used for moving the goods usually in horizontal direction, sometimes over very long distances and includes conveyors operated by continuously-moving carrying or pushing elements. The electric motor only provides driving force. Therefore, the conveyor, without electric motor will be conveyor and it cannot be called as a part of conveyor. Therefore, we find no infirmity in the impugned order. The appeal, filed by the Revenue, is rejected.

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Equivalent 2000 (118) ELT  756 (Tribunal)