2001(02)LCX0107
IN THE CEGAT, EASTERN BENCH, KOLKATA
Smt. Archana Wadhwa, Member (J) and Dr. S.N. Busi, Member (T)
COMMISSIONER OF C. EX., CALCUTTA-I
Order No. A-118/Kolkata/2001, dated 6-2-2001 in Appeal No. E/R-444/97
Cases Quoted
Madura Coats Ltd. v. G.O.I. — 1996(11)LCX0114 Eq 1997 (091) ELT 0313 (Mad.) — Referred [Para 3]
Ranadey Micronutrients v. Collector — 1996(09)LCX0009 Eq 1996 (087) ELT 0019 (S.C.) — Referred [Para 3]
DEPARTMENTAL CLARIFICATION CITED
C.B.E. & C. Circular No. 192/26/96-CX, dated 27-3-1996...... [Para 3]
Advocated By : Shri A.K. Biswas, Advocate, for the Appellant.
Shri R.K. Roy, JDR, for the Respondent.
[Order per : S.N. Busi, Member (T)]. - The issue for consideration is whether “Fan Regulator” is classifiable under sub-heading 8414.20 as claimed by the appellant or under sub-heading 8414.99 as held by the Revenue.
2. The facts in brief are that M/s. Kumar Traders, Kolkata have been engaged in the manufacture of “Fan regulators” with brand name of M/s. Polar Fan Industries Ltd. and supply the entire quantity to M/s. Polar Fan Industries Ltd. as the same are manufactured as per their specification. The appellants had been classifying the said goods under sub-heading 8414.20 of the Central Excise Tariff in their classification lists which were being approved from time to time. When Rule 173B of the Central Excise Rules, 1944 was amended by Notification No. 11/95-C.E. (N.T.), dated 16-3-1995 to the effect that instead of classification list, the assessee was required to file a declaration of goods manufactured or produced on or before 15-5-1995. Accordingly, the appellants filed a declaration wherein they classified the impugned goods under sub-heading 8414.20. Thereupon, the appellants received a letter dated 7-7-1995 from the jurisdictional Superintendent of Central Excise directing them to classify the said goods under sub-heading 8414.99. It was followed by a Show-cause-cum-demand Notice dated 12-9-1995 wherein it was proposed to recover a sum of Rs. 6,69,834/- for the period from 17-3-1995 to 31-8-1995 and also proposed to impose penalty for violation of Rule 173B(i)(bb) of the Central Excise Rules, 1944. On receipt of the same, the appellants moved the Hon’ble High Court of Calcutta which stayed the proceedings under the said Show-cause Notice subject to execution of a bond for differential amount of excise duty on the said goods. The Hon’ble High Court has also directed that it was open to the competent authority to issue a proper notice on the appellants. Accordingly, a Show-cause Notice dated 23-2-1996 was issued by the Assistant Commissioner asking the appellants to show cause as to why the impugned goods should not be classified under sub-heading 8414.99 instead of sub-heading 8414.20 w.e.f. 17-3-1995. The adjudication proceedings initiated under the latter Show-cause Notice resulted in reclassification of the impugned goods under sub-heading 8414.99. Being aggrieved by the said reclassification, the appellants filed an appeal before Commissioner (Appeals) but with no success. Hence, the present appeal before the Tribunal.
3. Shri A.K. Biswas, learned Advocate appearing for the appellants submits that no “electric fan” can work to its desired level without the “fan regulator”. The use of the regulator is to regulate the current and motor of the fan, and it is used for running with fan. Till 16-3-1995, the Department classified the same under sub-heading 8414.20. But on receipt of a clarification from the Central Board of Excise and Customs, New Delhi, the authorities below resorted to reclassification of the impugned goods under sub-heading 8414.99. The learned Advocate submits that such a reclassification is improper specially when there has been no change of nomenclature, character and use of the regulator. He further submits that the Commissioner (Appeals) erred in solely relying on the Circular No. 192/26/96-CX, dated 27-3-1996 of the Central Board of Excise and Customs, New Delhi in classifying the impugned goods under sub-heading 8414.99 in utter disregard of Section Note 2(b) and 4 of Section XVI of the Central Excise Tariff according to which the same are classifiable under sub-heading 8414.20. The learned Consultant argues that the Commissioner (Appeals) failed to appreciate that departmental clarifications, instructions or circulars are binding on the departmental officers and not on the tax payers. He argues that Commissioner (Appeals) incorrectly interpreted the judgments in Ranadey Micronutrients v. C.C.E. reported in 1996(09)LCX0009 Eq 1996 (087) ELT 0019 (S.C.) and Madura Coats Ltd. v. Government of India reported in 1996(11)LCX0114 Eq 1997 (091) ELT 0313 (Mad.). According to the learned Consultant, the said two cases are not applicable to the instant case inasmuch the departmental instructions and circulars are binding upon the departmental officers in their executive functions and not upon any quasi-judicial authorities or upon the courts of law.
4. Shri R.K. Roy, learned JDR appearing for the Revenue, reiterates the reasoning contained in the impugned order and argues that the impugned goods were correctly classified under sub-heading 8414.99 of the Central Excise Tariff.
5. We have heard the arguments advanced from both sides and carefully perused the records. We find that the Department resorted to reclassification of the impugned goods based on the Board’s Circular cited above and it is well settled that the appropriate authorities have the power to reclassify the goods having regard to the changed circumstances. In the instant case the reclassification of fan regulator is based on the Board’s Circular dated 27-3-1996 wherein it is clarified that when “regulators’ are cleared along with fans as a whole, the same are classifiable as “electric fans” under sub-heading 8414.20 and when fan regulators are cleared separately not in combination with fans, they are classifiable as “parts and accessories of electric fan” under sub-heading 8414.99 of the Schedule to the Central Excise Tariff Act, 1985. In the instant case, it is on record that the impugned goods are cleared with the brand name of M/s. Polar Fan Industries Ltd. as fan regulators independently and not in combination with polar fans. Hence, they are rightly classified under sub-heading 8414.99 as “parts and accessories of electric fan”. On a close perusal of the impugned order and a careful consideration of the various arguments of the appellants as recorded in para 3 supra, we are of the opinion that the lower authorities have correctly reclassified the same under sub-heading 8414.99. We, therefore, do not find any reason to interfere with the impugned order. As such, the appeal deserves rejection. Ordered accordingly.
6. In the result, the appeal is thus rejected.