Customs, Excise and Gold Tribunal - Tamil Nadu
Cce, Chennai vs Besmak Components (P) Ltd. on 23 March, 2007
Equivalent citations: 2007(118)ECC334, 2007ECR334(TRI.-CHENNAI), 2007(213)ELT533(TRI-CHENNAI)
ORDER P. Karthikeyan, Member (T)
1. Revenue has filed this appeal against the order passed by the Commissioner of Central Excise (Appeals), Chennai. In the impugned order, the order of the original authority dropping the proposal to reclassify certain plastic components of Chapter Heading 87.08 manufactured by M/s. Besmak Components (P) Ltd., and to demand differential duty of Rs. 3,45,437/- has been upheld.
2. M/s. Besmak Components (P) Ltd., manufactured various plastic components for use in automobiles, which were classified under CSH 87.08. The issue involved is the correct classification of these moulded plastic articles. The impugned goods fell in the following three categories. One category involved moulded articles such as housing, coupler and connectors. The assessee had classified these moulded plastic components as parts of motor vehicles since they formed parts of wiring harness used in automobiles. The second category of goods comprised items like mouldings, bobbins and laminations, protection barriers, dust caps etc. used in the manufacture of magneto assemblies. These items find application in magneto assemblies used in automobiles. The third category of goods were anti-rattle bush, safety clamps, slide, tongue adjustor spring and tongue stop (male and female) used in car seat belts. Deciding the Show Cause Notice issued to re-classify these groups of items under CSH 85.44, 85.05 and 3926.90 respectively and to demand a total differential duty of Rs. 3,45,437/-, the jurisdictional Assistant Commissioner dropped the proposals. The Commissioner (Appeals) sustained the order of the Assistant Commissioner.
3. From the impugned order it is seen that the lower appellate authority had found that connectors, housing, coupler etc., were being supplied to those units manufacturing automobile parts. Chapter Sub Heading 85.44 under which the revenue had wanted these items to be classified goods such as covered insulated wire, 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 or fitted with connectors. This heading did not cover parts. Similarly, as regards the next group of items such as mouldings, bobbins and laminations, protection barriers, dust caps etc., it is seen from the records that the original authority on a spot study had ascertained that these parts did not contain any magnetic material and were therefore not classifiable under heading CSH 85.05 as parts of magneto assembly. The third category covered items like anti-rattle bush, safety clamps, slide, tongue adjustor spring and tongue stop (male and female) used in car seat belts which were tailor made parts for use in automobiles classifiable under heading 87.08.
4. In the grounds of appeal, it was submitted that connectors, housing, coupler etc., of plastic manufactured by the assessee were supplied to the manufacturers of wiring harness. They were not supplied to automobile manufacturing units. As wiring harness was covered under heading 85.44, these components also were covered by heading 85.44 being parts of wiring harness. Similarly, items such as mouldings, bobbins and laminations, protection barriers, dust caps etc. were used in the manufacture of magneto assemblies. As magneto assemblies were classifiable under CSH 85.05, parts of magneto assembly were also classifiable under CSH 85.05. However, plastic components such as anti-rattle bush, safety clamps, slide, tongue adjustor spring and tongue stop (male and female) used in car seat belts were argued to be classifiable under CSH 3926.90 as parts of general use made of plastic. In canvassing classification of mouldings, bobbins and laminations, protection barriers, dust caps etc. under Chapter Headings 85.44 and 85.05, the revenue had cited Note 2 (b) of Section XVI in support. As regards the remaining goods such as anti-rattle bush, safety clamps, slide, tongue adjustor spring and tongue stop (male and female) used in car seat belts, it was argued that they being plastic parts of general use, they were covered by CSH 3926.90.
5. Ld. SDR reiterated the arguments advanced in the appeal filed by the Revenue. Nobody was present to represent the respondents.
6. We have carefully considered the facts of the case and the grounds of appeal. The first two categories of goods are parts of gadgets used in cars. As per section note 1 (k) to Section XVI, parts of automobiles cannot be classified under chapters 84 and 85. They have to be classified as parts falling under Section XVII. In the instant case they are classifiable as automobile parts of Chapter 87. The third category of goods is designed for use in automobiles and is of high degree of precision. They have to be classified under the related heading for parts of vehicles etc. of Section XVII. In this connection we also rely on the observation of the Apex Court in the case of G.S. Auto International Ltd. v. CCE, Chandigarh , wherein the Apex Court had observed as follows:
For the purpose of classification under Chapter Heading 87.08, a test to be applied is whether the goods are suitable for use solely or primarily with articles of Chapter Heading Nos. 87.01 to 87.05; if the answer is in affirmative, the goods will be classifiable under chapter heading 87.08.
In the above judgment the Apex Court had read the scope of the expression "parts of general use" defined in Note 2 to Section XV, of base metal. Corresponding Section Note 1(g) of Section XVI covers similar goods of plastics. The Court had made the observation in the context of classification of metal articles such as bolts, nuts, washers, bushes etc. It follows that the above guideline can be resorted to in classifying similar articles of plastics designed for use in motor vehicles. They have been aptly classified as parts of motor vehicles under heading 87.08 in the impugned order. In view of the above findings, we sustain the impugned order and dismiss the appeal filed by the Revenue.
(Operative portion pronounced in the open Court on 23.03.07)