Customs, Excise and Gold Tribunal - Delhi
Studds Ltd. vs Commissioner Of C. Ex., Delhi-Ii on 5 February, 2002
Equivalent citations: 2002(140)ELT511(TRI-DEL)
JUDGMENT V.K. Agrawal, Member (T)
1. The issue involved in this appeal filed by M/s. Studds Ltd., is whether the Helmet Locking Device, manufactured by them, is classifiable under Heading 83.01 of the Schedule to the Central Excise Tariff Act as claimed by them or under Heading No. 87.14, as confirmed by the Commissioner (Appeals), under the impugned Order.
2. When the matter was called, no one was present on behalf of the Appellants nor there was any request for adjournment of the hearing. We, therefore, took up the appeal for decision after perusing the record and hearing Shri V.K. Verma, learned DR. It has been submitted by the Appellants in the Memorandum of Appeal that after consulting the Department, they filed a classification list effective from 1-7-89 classifying the impugned product under Heading No. 83.01; that under their letter dated 15-11-89 they suggested that the impugned goods is not classifiable under 83.01 as it is made of plastic and it would be classifiable as article of plastics; that the Superintendent, under letter dated 20-12-89, informed them that Heading 83.01 "covers padlock and locks (keys, combination), clasps and frames with clasps in corporating locks; and your lock and keys are made out of base metal and appropriately covered under Chapter 83.01 to the Central Excise Tariff Act"; that the Department later sought to classify the impugned goods under Heading 87.14 but after discussion they were informed that the goods were covered under 83.01; that they filed another classification list on 2-2-90 effective from 1-7-89 under Heading 83.01; that the show cause notice dated 2-2-90 was issued to them for demanding duty for the period 1-7-1989 to 31-12-1989 on the ground that the aggregate value of clearance for the items produced under Chapter 87.14 had exceeded the limit of Rs. 30 lakhs; that by corrigendum dated 14-9-90, the classification of the item was changed to 87.14 and the rate of duty was changed from 15% to 20%; that this amounted to issue of a new notice and as such demand was time barred. They have, further, submitted that the essential character to the impugned goods is imparted by the metal lock and in accordance with Rule 3(b) of the Interpretative Rules, the goods are classifiable under Heading 83.01 of the Central Excise Tariff; that the end use can not be made the criteria for deciding the classification of a product; that the said devices are not exclusively used for the motor vehicles only whereas these are to be used according to the convenience of the customers.
3. The learned DR, on the other hand, submitted that the Assistant Collector in Adjudication Order No. 11/91, dated 21-2-91 has given clear findings that the contention of the party that the goods in question are for general use is not borne out by their own literature for studs 'Helmet Locking Device' wherein it is stated that "specially provided Break-off head belts ensure tamper proof permanent fixture on the two wheelers"; that since the goods in question are specifically intended for use with two wheelers, the goods are classifiable under Heading 87.14 only; that the goods in question is accessory of two wheelers.
4. We have considered the submissions of both the sides. Heading 87.14 of the Central Excise Tariff covers "Parts and accessories of vehicles of Heading Nos. 87.11 to 87.13 of the Tariff. As per Explanatory Notes to HSN, this heading covers parts, and accessories of a kind used with motorcycles, cycles fitted with an auxiliary motor, sidecars, non-motorised cycles provided the parts and accessories fulfil both the following conditions :
(i) They must be identifiable as being suitable for use solely or principally with the above mentioned vehicles; and
(ii) They must not be excluded by the provisions of the Notes to Section XVII.
The Appellants have not brought on record any evidence to controvert the findings in the impugned order to the effect that the goods were for use exclusively for locking the helmet on to the two wheelers and as such accessory of the two wheelers. Further there is no Note to Section XVII excluding the impugned goods from the purview of Chapter 87 of the Tariff. Accordingly we uphold the classification of the Helmet Locking Device under Heading 87.14 of the Central Excise Tariff Act. However, we agree with the Appellants that the demand of duty is hit by time limit specified in Section 11A(1) of the Central Excise Act. The show cause notice dated 2-2-1990 was issued to demand the duty of- Rs. 48,869.50 on the ground of denying them the benefit of SSI exemption claimed under classification list effective from 1-7-89 in respect of the impugned goods. It is only in Corrigendum dated 14-9-1990, it was mentioned that the impugned goods are classifiable under Heading 87.14 and demand of duty was increased to Rs. 52,170.75. We are of the view that the Corrigendum is in effect a new show cause notice as the grounds of demanding duty has been entirely changed. The time limit for demanding duty is thus to be computed from 14-9-90 when the Corrigendum (new show cause notice) was issued. As the date is beyond the period of six months specified in Section 11A(1) of the Act, the entire demand is time barred. We accordingly, set aside the demand of Central Excise duty.
5. The appeal is disposed of in these terms.