ORDER
S.S. Sekhon, Member (T)
1. The short question that
arises for determination in this appeal filed by the Department is whether the
lower authority was correct in holding that the bobbins and spools in question, supplied to transformer manufacturers were to be classified under
Heading 8504.00 as parts of transformers as contended by the Respondents
or under 3926.90 as has been set out in this appeal.
2. The Commissioner (appeals) vide his impugned order after studying the HSN chapter notes etc., came to the conclusion :-
“On a comparative study of the above mentioned chapter note, it is seen that under tariff entry relating to the Heading 3926.00, what is sought to be covered are basically items which are used as packing material. For instance, in the packing of yarn or thread, items like spools, bobbins, cops, cones and reels are used. It is also material to note that the exclusion itself talks of similar support of any material. Thus applying the rule of ejusdem generis, it would be seen that the items that would be qualified to be classified under this tariff entry, would be such as are used for packing or conveying or acting as a support to any other material. The above mentioned characteristics are not present in the formers or bobbins which are specially made for use in transformers. The appellant has adduced sufficient evidence to show that such bobbins and formers are sufficient evidence to show that such bobbins and formers are specifically designed to suit the requirement of the transformers. The bobbins and formers in the instant case should therefore be regarded as part of transformers, Accordingly they would be more appropriately classifiable under Heading 8504 and not under 39.26 (formerly 39.23).”
3. After considering the grounds taken in the appeal and the written submissions made by the respondents and hearing both sides, it is found……..
(a) In the case of Sasta Plastics India (P) Ltd., 2001 (132) E.L.T. 498 (T), this bench had come to the following conclusion
“As regards classification of the alleged TV part, it is admittedly, in the form of “a spool” and the Adjudicator has not accepted it to be excluded from Chapter 85, by virtue of Section XVI notes by finding that the note excludes, only such bobbins, spools, etc. which are used in Textile Industry. He has based his findings, since they are not defined, Common Parlance Test would apply, and as no yarn is wound or unwound from them, they are not spools. He disregarded the purchase order description ‘spool transformer’, ‘spool TV, etc., Since the winding of wire done on them is never unwound, they therefore were found to be not satisfying the condition of ‘for the conveyance of goods’ and would not fall under 39.23 and would be classified under 85.38 as parts of Television, since the Transformer manufactured from such wire wound spools, would be used as TV parts. We cannot accept the grounds for this classification arrived at. The exclusion notes of Section XVI are very clear and candid and would exclude ‘spools’ all sorts ‘Spools’ in the Collins Dictionary and Thesaurus are defined as –
“a device around which magnetic tapes, film, cotton, etc. can be wound up, with plates at top and bottom to prevent it from slipping”
“therefore we find, in Technology, a spool is understood as support for a coil. There is no restriction found by us to limit the exclusion by notes to Section XV of ‘spools’ used, only in yarn winding/unwinding, as arrived at by the learned adjudicator. We would, therefore consider that the ‘spools’ made of
plastic on which wire is coiled, and thereafter used as part of transformer
would be excluded form Section XVI, and thus Chapter 85. Thus they cannot
be classified under 85.30 as arrived at in the impugned order. We would consider them to be more appropriately classified under Heading 39.23 as
claimed to be correct, as per section notes read with Rule 1 of ‘Rules for Interpretation of the Schedule’ to CETA, 1985. The demands are therefore, required to be reworked out, keeping this classification in mind.”
In this view of the matter classification of the subject goods on which the transformer coils are to be wound cannot be made under heading other than 3923.
(b) The reliance of the respondents on the judgment in the case of Chamundi Textile (Silk Mills) Ltd. v. CC – 1989 (44) E.L.T. 332 (T), is not applicable to the present case. Since in that case spools made of plastic, were imported along with six sets of machines and benefit of classification under 84.38 was admissible to sets of machines and the bobbins as original equipment which had to fit as integral parts in those six sets of machines when they were first installed. Bobbins in that case also or covered as original fitment, were required to be classified under Heading 39.07 of the Customs Tariff. In the present case, there is no question of ‘original fitment’/or of an import along with any machine as a set. The ‘spools’ under clearance have to be classified as cleared i.e. individual items even if known as parts, which as per the exclusion notes under Section XVI would be classifiable under Chapter 39.
(c) The appellants have submitted that there are certain metallic pins attached. These entities have been found to be predominantly made of plastic as seen from the earlier order of Commissioner (Appeals) in appellants own case and appellants also are not contesting that fact. No evidence was produced before us that the essential characteristic of goods was brought out by the metallic pins. In this view of the matter and the fact that Board’s instructions as relied upon by the Respondents will not assist in the classification of the product, when as per the exclusion notes given in chapter to Central Excise Tariff Section XVI, the goods are excluded and are required to be classified based on the predominant material of which they are made, i.e. ‘plastics’ in this case.
(d) The other ground taken of classification under Customs Notifications DGFT input/output norms are criteria to be considered, when the classification can not be arrived at, in unambiguous terms based on the Tariff Section and HSN head notes. That is not the case before us.
4. In view of our findings, we find no merits in the Commissioner (Appeals) Order and same is set aside and the order of Assistant Commissioner is restored. Appeal disposed of accordingly.