S.S. Sekhon, Member (T)
1. This is a Revenue appeal against the order of the Commissioner (Appeals), wherein after examining the material, he came to the following conclusion :-
“I observe that even according to the Assistant Collector’s findings the subject castings are parts of gear box and clutch; there is no dispute about this fact. It is also admitted that these clutches and gear boxes are ultimately used in motor vehicles. However, the reasoning given by the Assistant Collector to classify them under Chapter heading 8708.00 is totally devoid of any merit for the following reasons: –
According to Note 2 of Section XVI, parts of machines are to be classified under any of the headings of Chapter 84 or 85 if they have been specifically included in any of these headings. Other parts, if suitable for use solely or principally with a particular kind of machine are to be classified with the machines of that kind. As rightly contended by the appellants, the exclusion clause under Section note 1(k) refers to those articles which are not specifically covered by Section XVI and also fall under Section XVII. Further the letter of the appellants’ customer M/s. Telco makes it clear that the subject goods viz. gear case cover top, gear case cover-rear and front extension arms, gear box housing front half and rear half etc. are all being used as parts of gear box, and clutch house casting is used for housing of clutches. I have therefore, no hesitation to hold that the reclassification ordered by the Assistant Collector under 8708 is not supported by any legal provision and therefore set aside the impugned order and allow the appeal with consequential relief.
In parting, I would like to observe that the time limit under section 11A will be applicable from the relevant date which in this case is neither 1.6.93 nor 18.6.93, but the actual date when the RT 12 for the month of June was filed by the party.”
2. The grounds taken in the appeal are as follows :-
“(1) As per section note 1(k) to Section XVI, the said section does not cover articles of Section XVII. It is not in dispute that gear box/clutch are parts of motor vehicles falling under Section XVII/Ch. 87. Therefore, the same are excluded from the scope of Section XVI, as per section note 1(k) to Section XVI stated above.
(2) As per section note 2(e) to Section XVII, the expression parts and accessories do not apply to articles of heading No. 84.83, provided they constitute integral parts of engines of motors. As per this note, gear box and clutch though specified under heading 84.83 are not excluded from the expression parts and accessories under Chapter 87, as the said goods are not integral part of engine or motor. Therefore, they are correctly classifiable under heading 87.08 as parts of motor vehicles.
(3) The HSN also contains similar explanatory notes as stated above viz. section note 2(e) to Section XVII(P.1409) AND Section Note 1(e) to Section XVI (P. 1129), the HSN explanatory notes have persuasive value for determining the classification under Central Excise Tariff. The Explanatory Notes at p. 1433 clearly states that gear box and clutches for motor vehicle falls under heading 8708. The impugned gear-box and clutch meant for motor vehicles are therefore, classifiable under heading 87.08 even as per the HSN Notes.”
3. Sri M. Murugan, learned DR appeared for the department and reiterated the grounds as made out by the Commissioner in the Revenue’s appeal and submitted that the order of the Commissioner (Appeals) should be set aside on these grounds. None appeared for the respondents.
4. We have considered the material on records, submissions made and find that the subject goods are parts of gear box and clutch which are classifiable under Heading 8483.00, therefore, these items cannot be said to be articles of Section XVII, which are not excluded by Section Note 1K to Section XVI. Therefore, we find no merit in the grounds urged in the appeal filed by the Revenue when the gear box is classified under heading 8483.00, parts thereof as per Notes have to be classified thereunder and not as parts of Motor vehicle under Chapter 87 as proposed in the Revenue appeal. The parts are not understood as parts of motor vehicle but are understood as parts of gear box and therefore, not only by reading of interpretation of Chapter Notes as conducted by Commissioner (Appeals) but also by commercial parlance, the goods will get classified as parts of gear box under Heading 8483.00. Therefore, we find no reason to uphold the present appeal.
5. In view of our findings, the order of the Commissioner (Appeals) is upheld and the Revenue appeal is rejected.