Customs, Excise and Gold Tribunal - Delhi
Cce, Bombay-1 vs M/S. Unicon Connectors (P) Ltd. on 1 May, 2001
Equivalent citations: 2001(131)ELT604(TRI-DEL)
ORDER
V.K. Agrawal
1. The issue referred to this Larger Bench for consideration is whether 'insulated wire/cable fitted with connectors' is classifiable under Heading 85.44 or 85.22/85.29 of the Schedule to the Central Excise Tariff Act.
2. Shri Ashok Kumar, learned D.R. submitted that the impugned product is essentially used for transmission of energy and information; that it has a general use and application similar to insulated wires and cables and as such the impugned product cannot be treated and classified as parts of the machinery or equipment with which or in which they are used; that Heading 85.44 of the Tariff covers insulated wire/cable whether or not fitted with connectors and accordingly the product is classifiable under the said heading. He also referred to the Explanatory Note of H.S.N. under Heading 85.44 which states that "wire, cable, etc., remain classified in this heading if cut to length or fitted with connectors (e.g., plugs, sockets, lugs, jecks, sleeves or terminals) at one or both ends. He further mentioned that the Explanatory Notes of H.S.N. do not contain any exclusion clause to exclude the impugned product from the purview of Heading 85.44. He relied upon the following decisions in support of his submission:-
(i) Shakun Products vs. CCE, Kanpur, 1997 (96) ELT 184 (T)
(ii) Perfect Electric Concern Pvt. Ltd. vs. CCE, Patna, 1997 (93) ELT 622 (T) In this case electrical switches for motor vehicles, piono key switch, driving and mechanical brake light switch, were classified under Heading 8536.90 which covers 'electrical apparatus for switching'.
(iii) Hindustan Safety Glass Works Ltd. vs. Asstt. CCE, Allahabad, 1998 (97) ELT Toughened and laminated glass in the shape of wind screen/side screen of motor vehicle was not classified under Heading 87.08 as parts of motor vehicle but as glass under Heading 70.04 of the Tariff.
3. On the other hand, Shri K.K. Anand, learned Advocate, submitted that the Respondents manufacture connectors which they fit with wires which they purchase from the market or from the manufacturers on payment of duty; that the product would be classifiable under Heading 85.44 only when they manufacture wire, cut the same to various sizes and fitted them with connectors; that they are not indulging in these activities as the wire is purchased from market; that Department has classified the Connectors manufactured by them under Sub-heading 8536.90 which has not been changed by the Department; that merely putting wires with connectors will not change the classification of the product and the impugned goods remain to be connectors classifiable under Heading 85.36 of the Tariff. He, further, stated that the India Institute of Technology, Mumbai, under its letter dated 22.1.1993, has opined that the product be classified under Heading 85.36 rather than under 85.44; that Explanatory Note of H.S.N. under Heading 85.36 states that other connectors, terminals terminal strips, etc., include small squares of insulating material fitted with electrical connectors (dominoes), terminals which are metal parts intended for the reception of conductors, and small metal parts designed to be fitted on the end of electrical wiring to facilitate electrical connection. He also referred to page 1521 of H.S.N. Explanatory Notes and contended that it is apparent that for falling under Heading 85.44, an assessee should first manufacture wires/cables and cut them to sizes. He also mentioned that the issue involved in Shakun Products is Classification under Chapter 85 or 87 and the product was known as 'wiring harness in market and was used as wiring; that in the present matter the impugned product is not mentioned specifically in the Tariff and their product is not used as insulated wire but is used only connectors in T.V. sets; that wiring harness in Shakun Products case was found to be usable in various equipments. He also pointed out that Board's Circular No. 25/88 dated 17.11.1988 weighed heavily with the Tribunal in deciding the matter. Finally, Shri K.K. Anand, learned Advocate, relied upon the decision in the case of CCE, Bombay vs. Dowell's Electro Works, 1997 (94)s ELT 674 (T) wherein cable terminals were held to be classifiable under Sub-heading 8536.90 of C.E.T.A. and mentioned that the decision earlier given in the case of CCE vs. Dowell Electro Works, 0190 (45) ELT 96 (t) has been confirmed by the Supreme Court as reported in 1996 (82) ELT A 162. Reliance has also been placed on the decision in the case of H.A.L. vs. C.C., Vizad, 1998 (104) ELT 355 (T) wherein P.C.B. was classified under 85.34 and not under 84.73 of Customs Tariff Act. Finally he relied upon the decision in the case of CCE, Mumbai-I vs. Raj Kumar Engineers, Final Order No. C-II/1339/00 WZB dated 20.5.1999 in which it was held as under:-
"The description in headings 85.44 speaks of insulated wires fitted with connectors. This classification will hold, where the wire is sold as such. But where such wire fitted with connectors is made with a specific end use in mind, that is where it is designed as part of a specific apparatus then its classification would be warranted under that sub-heading which is designed for inclusion of such parts. In the present case such wire connectors are used by people who make Tap-recorders or Television receivers. Shri Nankani cited the order of the Tribunal in the case of Delton Cables Ltd. vs. Collector 1988 (98) ELT 728 (Tribunal). In this case the Revenue had classified similar products under heading 85.44. The Tribunal observed that since quartz were used solely and principally as part of the telephone apparatus in terms of section Note 2(b) Section XVI, the classification attracted was under headings 85.17 as electrical apparatus for line telephony or line telegraphy. The tariff did not provide a separate classification for such parts and therefore this heading was attracted. The present case is governed by Note 2(a) of the said section which states that those parts which are goods included in the permissible heading have to be classified in those headings. Headings No. 85.22 as well as 85.29 cover parts suitable for use solely of principally in certain apparatus. In terms of this note, and taking into account the cited judgement, we find that the Commissioner was right in classifying the PCB Connectors with wire under heading 85.22 and 85.29."
The learned Advocate emphasised that the impugned product is used exclusively for use solely or principally with the apparatus of heading Nos. 85.25 to 85.28 and as such it may be classified under Heading 85.29 in view of Note 2(b) of Section XVII of the Tariff. In this regard he relied upon the following decisions:-
(i) Bells India Ltd. vs. CCE, Calcutta-II, 1999 (114) ELT 117 (T)
(ii) CCE, Bombay-III vs. Monark Electronics, 1999 (113) ELT 117 (T)
(iii) Shriram Refrigeration Industries vs. CCE, Hyderabad 1999 (113) ELT 418
4. We have considered the submissions of both the sides. The rival Tariff headings are extracted below:-
85.44 Insulated (including enamelled or anodised) wire, cable (including co-axial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors of fitted with connectors 85.22 Parts and accessories suitable for use solely or principally with the apparatus of heading Nos. 85.19 to 85.21 85.29 Parts suitable for use solely or principally with the apparatus of heading Nos. 85.25 to 85.28
5. Heading 85.44 expressly covers Insulated wire/cable and other insulated electric conductors, whether or not fitted with connectors. The Commissioner (Appeals) has mentioned in the impugned Order that the Respondents manufacture the connectors by moulding the plastic material; that the insulated wire is purchased by them from market or manufacture and the same is cut as per the requirement and are soldered or fitted to the connectors. Thus the product in question is nothing but insulated wire fitted with connectors and it is not in dispute that this is a new commodity chargeable to excise duty. There is a specific Heading in the Central Excise Tariff which covers the product in question. Explanatory Notes of H.S.N. provides very clearly that wire, cable, etc., remain classified in this Heading if cut to length or fitted with connectors at one end or both ends. the learned D.R. has rightly pointed out that Explanatory Notes H.S.N. below Heading 85.36 excludes "plugs and sockets, etc., assembled with a length of wire" from Heading 85.36 and these are classifiable under Heading 85.44. In view of the fact that the impugned goods are specifically covered under Heading 85.44, they are to be classified under the said heading only and can not be classified as parts either under heading 85.22 or 85.29 of C.E.T.A.
6. We observe from the perusal of Explanatory Notes of H.S.N. that Parts are to be classified alongwith the machines in respect of which they are suitable for use solely or principally subject to the general provisions regarding the classification of Parts which is contained in Note 2 to Section XVI of the Tariff. Note 2(a) provides that Parts which are goods included in any of the heading of Chapters 84 & 85 are in all cases to be classified in their respective heading. Rule 2(b) which provides that parts which are suitable for use solely or principally with particular machine or apparatus are classified in the same heading as those machines or apparatus, does not apply to parts which in themselves constitute an article covered by a heading of Chapter 84 and 85. These are in all cases classified in their appropriate heading even if specially designed to work as part of a specific machine. Accordingly Note 2(b) cannot be applied in the present matter for the purpose of classification as the impugned goods are classifiable by applying Note 2(a) to Section XVI.
7. We do not find any substance in the submissions of the Ld. Advocate that for the purpose of classifying the impugned product under Heading No. 85.44, the assessee should first manufacture wire and then cut to size the same. The classification of an excisable product cannot depend on the fact as to who manufactures the raw material/input. Merely because the Respondents, in this case, manufacture connectors and purchase wire from market, the classification of the impugned product cannot be determined on the strength that they are not manufacturing wire themselves. The decision in the case of CCE vs. Dowell's Elektro Works, 1990 (45) ELT 96 is not applicable to the present matter as the goods involved in the said case were cable terminals. We, therefore, hold that the view taken by the Tribunal in Shakun Products vs. CCE, Kanpur in classifying the products wires/cables cut to length and fitted with connectors under Heading 85.44 of the C.E.T.A. is correct view and the impugned goods are classifiable under the said Heading only. The view taken in the case of CCE, Mumbai vs. Raj Kumar Engineers, Final Order No. C-II/1339/99-WZB dated 20.5.1999 is not correct inasmuch as both Headings 85.22 and 85.29 were excluded form Note 2(a) to Section XVI and the classification could not have been determined under these headings by applying Note 2(a) to Section XVI.
8. We accordingly hold that the impugned goods are classifiable under Heading 85.44 of the Schedule to the Central Excise Tariff act. As only the issue of classification is involved, the Appeal filed by the Revenue is allowed.