CASE NO.: Appeal (civil) 4564 of 2002 PETITIONER: M/s Intel Design Systems (India) P. Ltd RESPONDENT: Commissioner of Customs & Central Excise DATE OF JUDGMENT: 11/02/2008 BENCH: Dr. ARIJIT PASAYAT & LOKESHWAR SINGH PANTA JUDGMENT:
J U D G M E N T
CIVIL APPEAL NO. 4564 OF 2002
Dr. ARIJIT PASAYAT, J.
1. Challenge in this appeal is to the order passed by the
Customs, Excise and Gold (Control) Appellate Tribunal, Fort,
Mumbai (in short ‘CEGAT’) dismissing the appeal filed by the
appellant questioning correctness of the order in appeal dated
27.10.1999 passed by Commissioner, Customs and Central
Excise (Appeals), Pune (in short ‘Commissioner (Appeals)).
Background facts in a nutshell are as follows:
The appellant, engaged in the manufacture of excisable
goods, inter alia, filed classification list of their products
mentioned at Sr. No.1(a) to (u) of the classification declaration
with effect from 20.12.1996 claiming classification under
Chapter Heading 8710 of the Schedule to the Central Excise
Tariff Act, 1985 (in short the ‘Tariff Act’). The goods in the
classification list were described as parts of tanks and other
armoured and motorized fighting vehicles under Chapter Sub-
Heading 8710.00 of the Tariff Act. It is the contention of the
appellants that the said goods are manufactured for
Government of India, Ministry of Defence and are used in the
tanks and armoured fighting vehicles. These goods are strictly
manufactured as per drawing and design supplied by the
customer i.e. Ministry of Defence. Since the goods are
manufactured for use solely and principally for fitting into the
tanks in armoured fighting vehicles of the Defence
Department, the correct classification would be under Chapter
sub-heading 8710.00. In support of their contention, they
have also relied upon the Circular No.17/90 CEX IV dated
9.7.1990 in which it was clarified that transmission elements,
switches, gears, gearing etc. do not fall under Chapter Heading
84.83 when they are specifically designed for use in the
vehicles of Section XVII of the Tariff. In support they have
submitted CT2 certificate received from Superintendent,
Central Excise, Madras wherein it was stated that said goods
are classifiable under Chapter Heading 8710. In view of the
evidence, it was contended that their classification under
Chapter Heading 8710 was in order. On the other hand, the
adjudicating authority relied upon Note 2(f) to Section XVII
which excludes the goods i.e. electrical machinery and
equipment falling under Chapter 85 and since the appellants’
manufacture goods such as contractors, switches, control box
etc. and are used for switching/protecting electrical circuits or
for making connections to or in electric circuits, these are
parts of electrical equipments falling under chapter sub-
heading 8536.90 and CBEC circular was, therefore, not
relevant. Moreover, reliance was placed on the interpretative
Rule 3(a) which provides that specific entry shall be preferred
to the heading providing more general description.
Accordingly, Assistant Commissioner classified the goods
under chapter sub-heading 8536.90 and confirmed the
demand.
CEGAT dismissed the appeal filed by the appellant.
2. Learned counsel for the appellant submitted that the
classification list for period in question was submitted on
9.4.1997 for the previous periods. Such classification lists
were approved. The show-cause notice was issued by the
Department proposing to levy duty under Heading 8536.90.
The Department had not proved that articles fall within
Heading 8536.90. It has also relied on Circular No.17/90-
CX.4, dated 9.7.1990. A note II has no application because
Department has not proved that the articles fall under Chapter
85. Leaned counsel for the respondent supported the orders.
3. It is to be noted that the CEGAT has held that goods are
identifiable as goods under Chapter 8536.90. The authorities
have categorically held that the article falls under Chapter 85.
4. As per Rule 1 on Interpretive Rules, classification of
excisable goods is to be determined according to the terms of
the Heading and in terms of Section/Chapter notes. Note 2(f)
to Section XVII (which governs Chapter 87) excludes the goods
viz. electrical machinery and equipment (Chapter 85). The
goods in question i.e. contractors, switches, control box etc.
are the goods used for switching, protecting electrical circuits
or for making connections to or in electric circuit. These
parts/components are specifically covered under CSH
8536.90. The CBEC Circular relied upon by the assessee is
not relevant.
5. As per the Explanatory Notes to HSN the parts falling
under Chapter Heading 8710 would be covered under the said
chapter, provided they fulfill both the conditions i.e. they must
be identifiable as being suitable for use solely or principally for
such vehicles and that they must not be excluded by the
provisions of Notes to Section XVII. The identifiable parts
under the said heading bodies of armoured vehicles and parts
thereof, cover special road wheels for armoured cars,
propulsion wheels for tanks, tracts etc. As per this
requirement, the goods should not only be identifiable to be
armoured vehicles, but it should so not have been excluded by
Notes to Section XVII. The Chapter note 2(f) excludes
electrical machinery and equipment falling under Chapter 85.
Explanatory Notes to HSN relating to the parts and accessories
excluded by Note 2 specify items with reference to specific
Chapter Heading as per (7) (a), (k) which excludes photographs
and other current collectors for electric traction vehicles,
fuses, switches and other electric apparatus of Heading
No.85.35 or 85.36. The items, therefore, manufactured by the
appellants are identifiable or are in the nature of goods falling
under Chapter Heading 85.36. Since these fall under the
category of excluded goods under Chapter Notes, even though
they are used specifically solely or principally with the
armoured vehicles of Chapter Heading 8710, they are
classifiable under Chapter Heading 8536.90 only as held by
the adjudicating authority.
6. The appeal is therefore sans merit, deserves dismissal
which we direct.