Custom, Excise & Service Tax Tribunal
M/S. Transenergy Ltd vs Cce, Chennai on 2 September, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/972/2001
(Arising out of Order-in-Appeal No.37/2001 (M-II) dated 27.02.2001 passed by the Commissioner of Central Excise, (Appeals).
For approval and signature
Honble Shri P. G.CHACKO, Member (Judicial)
Honble Shri P.KARTHIKEYAN, Member (Technical)
_______________________________________________
1. Whether Press Reporters may be allowed to :
see the Order for Publication as per Rule 27
of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 :
of the CESTAT (Procedure) Rules, 1982 for
publication in any authoritative report or not?
3. Whether the Honble Member wishes to see :
the fair copy of the Order.
4. Whether order is to be circulated to the :
Departmental Authorities? _______________________________________________
M/s. Transenergy Ltd., : Appellant
Vs.
CCE, Chennai : Respondent
Appearance Shri R. Raghavan, Adv., Shri M. Kannan, for the appellants Shri N.J. Kumaresh, SDR, for the respondent CORAM Shri P.G. CHACKO, Member (Judicial) Shri P. KARTHIKEYAN, Member (Technical) Date of hearing : 02.09.08 Date of pronouncement:
FINAL ORDER No.________/2008 Per P. KARTHIKEYAN CNG conversion kits (Kits, for short) manufactured and cleared by the appellants help motor vehicles designed to run on fuels like petrol/diesel run on CNG. The kit provides an alternate fuel charging system to the one existing in the engine. It consists mainly a cylinder (container for CNG), pressure regulators and valves. Appellant in this case had cleared these kits during the period 10/97 to 2/99 classifying them under heading 8409 of Central Excise Tariff. IC engine parts are covered under the heading 8409. The impugned order confirmed classification of these parts under heading 8708. A demand of differential duty of Rs.12,66,876/- was raised against the appellant consequent to the revision of classification. The impugned order of Commissioner (A) affirmed the order of the original authority.
2. We have heard the parties to the dispute. As per Rule 1 interpretative Rules governing classification of goods for the purpose of excise duty, goods are to be classified in accordance with the description in the entries, the relevant Section notes and Chapter notes, if any. Also, as per interpretative Rule 3(a), entry which provides the most specific description has to be preferred. The rule reads as follows:
When by application of sub-rule (b) of rule 2 or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effect as follows:
(a) The heading which provides the most specific description shall be preferred to headings providing a more general description In view of this legal position, though IC engine parts are parts of motor vehicles heading 8708, heading 8409 is the more specific entry for these kits. The kits in question provide an alternative fuel charging system to the one inbuilt in the IC engine. Therefore, they are IC engine parts. Moreover ITC (HS) covers imported kits under entry 8409 for Exim Policy purposes. Heading 8409 covers Parts suitable for use solely or principally with the engines of heading 8407 or 8408. The entries cover specified parts and other parts. The subheading is reproduced below:8409
Parts suitable for use solely or principally with the engines of heading 8407 or 8408 Heading 8407 & 8408 are as under:8407
Spark-ignition reciprocating or rotary internal combustion piston engines 8408 Compression-ignition internal combustion piston engines (diesel or semi-diesel engines)
3. We find from the entries above that kits are parts of IC engines of heading 8407 & 8408. Therefore the impugned goods are correctly classifiable under heading 8409. The order under challenge has no sound legal basis and is not sustainable. In the result we set aside the impugned order and allow this appeal.
(Order pronounced in Open Court on )
(P.KARTHIKEYAN) (P.G. CHACKO)
MEMBER (T) MEMBER (J)
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