ORDER
P.K. Kapoor, Member (T)
1. This is an appeal against the order dated 23-11-1989 passed by the Collector of Customs (Appeals), Madras. The appellants are manufacturers of plywood. They imported a consignment of “Peeling Knives” designed for use exclusively with wood peeling machine. The ‘knives’ in question were declared by the appellants in the Bill of Entry as classifiable under sub-heading 8208.20 read with Notification No. 59/87 dated 1-3-1987. The customs authorities modified the declaration and classified the “peeling knives” under sub-heading 9806 as “parts of machinery, equipments, appliances, instruments and articles of Chapter 84, 85, 86, 89 and 90”. The ‘knives’ in question were assessed to basic duty at 100% ad valorem plus auxiliary duty at 45% and additional duty at 15% ad valorem. After clearance of the goods the appellants filed a refund claim on the grounds that “wood peeling knives” were correctly classifiable under sub-heading 8208.20 and chargeable to basic duty at 85% ad valorem with auxiliary duty at 5% and ‘nil’ additional duty in terms of Notification No. 154/86, dated 1-3-1986 as amended. The Assistant Collector by his order dated 15-5-1989 rejected the refund claim on the grounds that the goods were correctly assessed under sub-heading 9806 read with Notification No. 69/87, dated 1-3-1987. Being aggrieved by the order passed by the Assistant Collector, the appellant filed an appeal before the Collector (Appeals), Madras, who by the impugned order rejected the appeal.
2. On behalf of the appellants, Shri Madhav Rao, Learned Advocate submitted that “wood peeling knives” being designed for use exclusively with “Machine Tools for working wood” falling under Chapter Heading 84.65 were correctly classifiable under the specific sub-heading 8208.20 and as applicable to goods falling under Heading 82.08 they were chargeable to the same rate of duty as attracted under Heading 84.65 read with Notification No. 154/86-Cus. as applicable to wood working machine tools on which the knives in question were to be used. He, therefore, pleaded that the impugned order holding the goods as classifiable under sub-heading 9806.00 may be set aside.
3. On behalf of the respondents, Shri Mohan Lal, Learned JDR submitted that the matter is covered against the appellants by the Tribunal’s order in the case of Gujarat Steel Tubes Industries v. Collector of Customs, Bombay reported in 1994 (71) E.L.T. 756 in which it has been held that ‘interchangeable tools’ useable as parts of machinery falling under Chapter 84 of Central Excise Tariff Act, 1985 were classifiable under Heading 98.06. He pleaded for the rejection of the appeal.
4. We have examined the records of the case and considered the submissions made on behalf of both sides. We find that in the Larger Bench order of this Tribunal in the case of Gujarat Steel Tubes Industries v. Collector of Customs, Bombay (supra) it has been held that parts of machinery falling under Chapter 84 of the Central Excise Tariff Act, 1985 are classifiable under Heading 98.06 and even though they do not cease to be “tools” classifiable under Chapter 82 for the purpose of Notification No. 69/87-Cus., dated 1-3-1987 by virtue of Sr. No. (xi) of the proviso to the said notification they would be excluded from the benefit of notification. Paras 26 to 34 of the said order being relevant are reproduced below:-
* * * * * * * 5. On the ratio of the Tribunal's order extracted above, we hold that the disputed "wood peeling knives" designed for use with wood working machines covered by Heading 84.65 were correctly classifiable under subheading 9806. We therefore do not find any infirmity in the order passed by the Collector (Appeals) and reject the appeal filed by the appellants.