ORDER
U.L. Bhat, J. (President)
1. The department being aggrieved by Order-in-Appeal No. 274/87 (B), dated 30-9-1987 passed by Collector of Central Excise (Appeals), Madras reversing the Order-in-Original No. 19/87, dated 27-2-1987 passed by Assistant Collector of Central Excise, Mysore Division has filed the present appeal.
2. The dispute has arisen on classification list No. 1/85-86 filed by appellant engaged in the manufacture of locomotives and parts thereof. Classification list described the manufactured goods under two headings namely “OTHER RAIL LOCOMOTIVES, ‘SAN’ DIESEL LOCOMOTIVES, DIESEL ELECTRIC LOCOMOTIVES and “PARTS OF ‘SAN’ LOCOMOTIVES OR ROLLING STOCK”. Under main item two, description of various such parts are furnished. We are concerned in this appeal only with “Gears for Locomotives” and “Pinions” described as parts in the classification list. Respondent suggested classification under sub-heading 8607.00 for all the parts of locomotives. Assistant Collector of Central Excise issued show cause notice suggesting classification of the parts under Heading 84.83. Though, appellant resisted the notice, Assistant Collector confirmed the proposal in the show cause notice and classified “Gears” & “Pinions” under Chapter Heading 84.83. Collector (Appeals) having reversed this decision and upheld the classification suggested by appellant, the department is aggrieved.
3. Chapter 84 occurs under Section XVI and deals with “NUCLEAR REACTORS, BOILERS, MACHINERY AND MECHANICAL APPLIANCES; PARTS THEREOF”. Chapter Heading 84.83 reads thus :-
“TRANSMISSION SHAFTS (INCLUDING CAM SHAFTS AND CRANK SHAFTS) AND CRANKS; BEARING HOUSINGS AND PLAIN SHAFT BEARINGS; GEARS AND GEARING; BALL SCREWS; GEAR BOXES AND OTHER SPEED CHANGERS, INCLUDING TORQUE CONVERTERS; FLYWHEELS AND PULLEYS, INCLUDING PULLEY BLOCKS; CLUTCHES AND SHAFT COUPLINGS (INCLUDING UNIVERSAL JOINTS).”
4. Chapter 86 deals with the following :-
“RAILWAY OR TRAMWAY LOCOMOTIVES, ROLLING-STOCK AND PARTS THEREOF…”
5. It is explained by the learned Counsel for the respondent that ‘pinion’ is a kind of gears and gears and pinions manufactured by respondent are to particular specifications to suit locomotives manufactured by respondent and cannot be used generally in machinery equipments etc. other than locomotives. We find this stand taken by respondent in the reply to the show cause notice. There was no contrary averment in the show cause notice. At no stage had the department raised a contention that gears and pinions manufactured by respondent as parts of locomotives can be used in other equipment etc. Even in the present memorandum of appeal, no such contention has been taken. We, therefore, proceed on the basis that gears and pinions manufactured by respondent as parts of locomotives can be used only vis-a-vis locomotives and cannot be put to general use.
6. It is the contention of the department that articles in dispute are ‘gears’ and gears are specifically included in Chapter Heading 84.83 and as between the general description “parts of locomotives” in Chapter Heading 86.07 and the specific description “gears” occurring in Chapter Heading 84.83, the specific should be preferred to the general and that being so, the Collector (Appeals) was in error in holding that the correct classification would be under Chapter Heading 86.07. Smt. Aruna N. Gupta, JDR also placed reliance on HSN explanatory note under Section XVI Chapter 84.83 at page 1326. The note is to the following effect :-
“(C) GEARS AND GEARING INCLUDING FRICTION GEARS AND CHAIN SPROCKETS
…
The Group covers all types of gears including simple cog wheels, bevel gears, conical gears, helical gears, worms, rack and pinion gears, differential gears, etc., and assemblies of such gears. It also covers toothed and similar wheels for use with transmission chains.
…”.
7. We do not think that the above is of any assistance for the department since the gears covered by HSN explanatory note are gears of general use.
8. Note 1(k) to Section XVI reads thus :-
“This Section does not cover – Articles of Section XVII”.
9. Note 2(e) to Section XVH reads thus :-
“The expressions “parts” and “parts and accessories” do not apply to the following articles, whether or not they are identifiable as for the goods of this section :-
(e) Machines and apparatus of Heading Nos. 84.01 to 84.79, and parts thereof; articles of Heading No. 84.81 or 84.82 and, provided they constitute integral parts of engines or motors, articles of Heading No. 84.83;”
10. Note 3 reads thus :-
“References in Chapters 86 to 88 to ‘parts’ or ‘accessories’ do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those Chapters. A part or accessory which answers to a description in two or more of the headings of those Chapters is to be classified under that heading which corresponds to the principal use of that part of accessory.”
Section Note 3 to Section XVII makes it clear that reference in Chapters 86 to 88 to ‘parts’ do not apply to parts which are not suitable for use solely or principally with the articles of those Chapters. In other words, parts which are suitable for use solely or principally with the articles of Chapters 86 to 88 will be covered by the respective chapters. It is clear that gears manufactured by respondent are gears intended for use vis-a-vis locomotives and are suitable for use solely for such locomotives and therefore would attract Chapter 86 and not Chapter 84.
11. The Assistant Collector relied on Note 2(e) to Section XVII to hold against the applicability of Chapter Heading 86.07. The departmental representative also supported this stand taken by the Assistant Collector. Note 2(e) to Section XVII, no doubt, takes articles of Heading 84.83 provided they constitute integral parts of engines or motors, out of Chapters 86 to 88. The subject matter of dispute namely “gears” can be regarded as ‘articles of Heading 84.83’ but they do not constitute integral parts of engines or motors. Therefore Note 2(e) to Section XVII cannot be invoked in this case.
12. In the above circumstances, we are inclined to agree with the view taken by Collector (Appeals) that “gears and pinions” manufactured by respondent for use vis-a-vis locomotives would fall under Chapter Heading 86.07. We are supported in this view by a decision of the Tribunal in Poona Radiators reported in 1990 (48) E.L.T. 93 (T) to a similar effect in relation to radiators for use in locomotives.
13. For the reasons indicated above, we find no ground to interfere and accordingly dismiss the appeal.