2002(12)LCX0111

IN THE CEGAT, WEST ZONAL BENCH, MUMBAI

S/Shri Gowri Shankar, Member (T) and G.N. Srinivasan, Member (J)

NEW STANDARD ENGINEERING CO. LTD.

Versus

COMMR. OF C. EX., MUMBAI-V

Order No. 4413/2002-WZB/C-II, dated 20-12-2002 in Appeal No. E/2414/2002-Mum.

Cases Quoted

Commissioner v. Gabrial India Ltd. — 2000(02)LCX0037 Eq 2001 (134) ELT 0406 (Tribunal) — Distinguished [Paras 3, 5]

Commissioner v. San Transmissions — 1998(09)LCX0203 Eq 1999 (107) ELT 0482 (Tribunal) — Distinguished [Paras 3, 5]

Flakt India Ltd. v. Commissioner — 1998(05)LCX0178 Eq 1999 (108) ELT 0203 (Tribunal) — Distinguished..... [Paras 3, 5]

Advocated By :     Shri D.D. Gwalani, Advocate, for the Appellant.

Shri Hitesh Shah, DR, for the Respondent.

[Order per : Gowri Shankar, Member (T)]. - The appeal is taken up for disposal, after waiving deposit, with the consent of both sides.

2. The question for consideration in this appeal, is the classification of nine articles that the appellant manufactured. These are stated to be as follows: crank shafts, plain shafts, shafts, gears, bearing gears, pinions, housing, bearing housings and pulleys. In the order impugned in the appeal, the Commissioner (Appeals) has confirmed the classification of these goods determined by the Deputy Commissioner in Heading 84.83 of the Central Excise Tariff.

3. The Counsel for the appellant contends that these goods have been specially manufactured for use in as parts of textile machinery, or as parts of, for forging hammer and for that purpose have been given special shape and size. Accordingly, by applying the provisions of Note 2(b) to Section XVI of the Tariff, they have to be classified along with machinery of which they form part. He relies upon the decisions of the Tribunal in Flakt India Ltd. v. C.C.E. - 1999 (108) ELT 203, CCE v. San Transmissions - 1999 (107) ELT 482 and CCE v. Gabrial India Ltd. - 2001 (134) ELT 406. In reply to a question by the Bench, he clarifies that the shafts under consideration are intended for transmission of power and that “housing” is not different from “bearing housing.”

4. Note 2(a) to Section XVI of the Central Excise Tariff specifies the criteria for classification of parts of machinery which fall for classification in any of the chapters of that section. Clause (a) of this note provides that parts which are goods included in any of the headings of Chapter 84 or Chapter 85 other than those of headings which are specified therein are in all cases to be classified in their respective headings. Heading 84.83, in which the goods have been classified by the department, is not among the headings which are excluded in the note. This heading includes within its scope transmission shafts, crank shafts, bearing housing, gears and gear ring and pulleys. Therefore, the goods under consideration, being included in these headings would rightly be classified in that heading. The reliance upon Note 2(b) is misplaced. It only refers to other parts i.e. parts other than those dealt with in clause (a).

5. We will now deal with the decisions that are cited. In CCE v. Gabrial India Ltd. what was under consideration was classification of bushes and thrust washers which the Tribunal found to be different or plain shaft bearings of Heading 84.83. In CCE v. San Transmission, the Tribunal was concerned with classification of gears and pinions which were parts of locomotives. Locomotives and their parts are classifiable in Heading 86.07 and fall in Section XVII of the Tariff. For classification of goods classifiable in this Section, different criteria specified in the notes to that Section, apply. Therefore, gears of locomotives or other conveyance classifiable in Section XVII cannot be treated on the same footing as gears and other goods with which we are concerned. This is in fact made clear in the decision itself in Flakt India Ltd. v. CCE, the Tribunal was concerned with the classification of shaft bearing assembly, and noting that these are different from transmission shaft, did not approve of their classification in Heading 84.83. These decisions are therefore not relevant to the case before us.

6. We therefore do not find any reason for interfering with the classification approved. However, we note that it is possible for the appellant to have been unclear as to the correct classification and accordingly set aside the penalty of Rs. 5,000/- imposed on it.

7. Appeal allowed in part.

Equivalent 2003 (153) ELT 329 (Tri. - Mumbai)