Customs, Excise and Gold Tribunal - Tamil Nadu
Autolec Industries Ltd. vs Commr. Of Central Excise on 22 March, 2000
Equivalent citations: 2000(71)ECC719
ORDER
1. These appeals are against the order in Appeal No. 256/89 (M) dated 27.9.89 passed by the Collector (Appeals). Briefly the dispute concerns classification of shafts and pulleys for water pump. The appellants proposed classification under 84.13, the Revenue under84.83 of the CET, 1985.
2. Heard Shri R. Raghavan, learned Counsel for the appellants who submits that the said shafts and pulleys are specifically designed for use in the manufacture of automotive water pumps which is bearing a registered part No. and is only suitable for fixing in an IC engine to rotate the water from the rotar connected to the IC engine within the specified temperature zone. In the trade it is only known as part of automotive water pump and is only sold by dealers of automotive parts. Therefore it has to be regarded as part of automotive water pump in terms of Note 2(a) of Section XVI. He cites the decision of the Tribunal in the case of Moosa Haji Patrwala v. CCE as , and also in the case of Chamundi Machine Tools Ltd. v. CCE as .
3. Shri S. Kannan, learned DR submits that the basic use of the said shaft is to transmit power from the IC engine to which it is connected at appropriate place when the motive rotary power is transmitted through this shaft and the pulley to the impeller in the water pump. The impeller is driven by this shaft and pulley rotating at high speed. Therefore, the shaft and the pulley perform the functions of maintaining the vacuum for the purposes of drawing and pushing water in the housing of the pump. Instead only the functions of this equipment is to transmit the rotary motive power from the engine to the impeller of the pump. Therefore, when specific heading is available in the tariff for covering transmission shaft which transmits the motive power then we cannot classify the same in a lesser specific heading concerning parts of water pump irrespective of how it may be traded in the market. He further submits that unless Note 2(a) of Section XVI is clearly found inapplicable we cannot proceed under Rule 2(b) and this principle has been repeatedly upheld by this Tribunal in various decisions. He also cites the decision of the Tribunal in the case of Larsen & Toubro v. CCE as reported in 1988 (98) ELT 861 wherein the Tribunal had held that Torsion Shaft having been used for transmitting rotary motive power would be classifiable under heading 84.83 of the tariff and not under 8479.00. He submits that the function of this shaft being similar, the ratio of this decision would apply. With respect to the applicability of Note 2 to Section XVI he cites the decision of the Tribunal in the case of CCE v. Alpump as , wherein it was held that in view of Note 2(a) of ibid, pulleys even if they are used in water pumps, would be classifiable under 84.83 of the tariff. He submits that the same principle applies to the facts of this case.
4. At this point, the learned Counsel submits that on limitation he has a strong case inasmuch as that the order in original attendant to the order in appeal impugned had proposed re-opening the classification after approval of the classification list in their favour. Therefore, for the question of limitation the Apex Court's decision in the case of CCE v. Costspun as would apply and to that extent for certain period the demands would be time barred as the dispute is for the period from 20.7.97 to 11.6.98 whereas the show cause notice is dated 19.1.88. He therefore submits that the demand if any in terms of the said decision would be only prospective with effect from 19.1.88.
5. We have considered the rival submissions and the records of the case. We find that as far as the merits of the case is concerned, the issue is no longer res integra. It is not disputed that the said shaft and pulleys are used to transmit motive power from the IC engine to the impeller of the water pump chamber. Therefore, in terms of the two decisions cited by the learned DR (supra) the said shaft would be classifiable under heading 84.83 in terms of Note 2(a) Of Section XVI of the tariff. However, we find considerable force in the submissions of the learned Counsel with respect to the part of duty demanded being time barred in terms of the Apex Court decision in the case of CCE v. Cotspun (supra). Since the show cause notice is dated 19.1.88 and proposes to change the approved classification under the classification list, therefore, the duty demand needs to be confirmed only prospectively from that date. Ordered accordingly. The appeals are partially allowed in the above terms.