Customs, Excise and Gold Tribunal - Tamil Nadu
Cce vs Arkonam Castings And Forgings Ltd. on 2 February, 1999
Equivalent citations: 1999(84)ECR460(TRI.-CHENNAI)
ORDER G.R. Sharma, Member (T)
1. Revenue has filed this Appeal on the ground that moulding, core making, pouring, fettling and heat treatment carried out by the Respondents herein, the castings attained essential characteristics of parts of machinery and, therefore, were liable to duty as parts of machinery.
2. The facts of the case, briefly stated, are that the Respondents herein are engaged in the manufacture of castings of articles of Steel, viz. Transmission Mill Gear, Transmission Gear Wheel, Cement mill gear, Hopper cap, Big Bell bottom and Front upper chock. The Asst. Collector held that castings for transmission mill gear; transmission gear wheel and cement mill gear as machinery parts not elsewhere specified, were classifiable under Tariff heading 8485.90. He also directed the Assessee to pay differential duty. On review of this order, the Coljector of Central Excise held that the Asst. Collector had categorically held that these castings are considered as having reached the stage of machine parts and the other items had not reached the stage of machine parts, therefore, there was no necessity to interfere with the order. Against this, the Revenue has come up in Appeal.
3. Shri R.D. Negi, the Id. SDR appears for the Appellant Commissioner.
4. None appeared for the Respondents. However, they have made a request to decide their case on merits. Therefore, we are passing the following order after hearing the Id. SDR, Shri Negi and perusing the case law cited and relied upon by the Respondents.
5. We note from the evidence placed before us that only fettling and grinding had been done on the castings, machining of the castings and giving them a definite shape was done at the Customer's end. We find that similar issue came up for decision before the Tribunal in the case of Mis. Shivaji Works Limited v. CCE Aurangabad . In this case, the Tribunal Held:
9.4. Lower Authorities have relied on Rule 2(a) of Interpretative Rules to arrive at the finding that the 'castings' in question are parts of machine or parts of motor vehicle. We shall now examine and analyse the wording of Rule 2(a) whether such a result is possible. Rule 2(a) has already been extracted in para 5 above. It states that any reference in a heading to goods shall be taken to include a reference to those goods incomplete or unfinished, provided that incomplete or unfinished goods have the essential character of the complete or finished goods. In other words, taking the example of the concerned Heading 73.25, reference to 'other cast articles of iron or steel' would include reference to incomplete or unfinished other cast articles of iron and steel. We have already observed that a cast article is complete when it has been proof-machined and surface defects have been removed. Earliest form of "cast article' is when it comes out of the casting mould. The heading 73.25 would, therefore, include all 'castings' from the stage of their emergence from the casting mould to the stage of being proof-machined. Similarly, an incomplete/unfinished part of machine or motor vehicle would also be covered under Chapters 84, 85 or 87 as the case may be. A machine part or motor vehicle part, subject to any section or Chapter note, would normally be one which is ready for use in a particular machine or motor vehicle. Application of Rule 2(a) would lead us to conclude that an incomplete or unfinished part of machine or motor vehicle would fall under Chapters 84, 85 or 87, subject to fulfilment of the condition of 'essential character'. Rule 2(a) does not permit us to conclude that when an article squarely falls under a particular tariff heading, it can be made to fall under another heading by invoking the concept of essential character. This is against the plain reading of Rule 2(a). But this is precisely what is attempted to be done by the lower authorities in the impugned orders. It is not denied that 'castings' of iron and steel do fall under Heading 73.25, but because the castings have the 'essential character' of products under Chapters 84, 85 or 87, such 'castings' should be deprived of their most appropriate and only classification. Such an interpretation of Rule 2(a) is untenable. It will create clashes within different headings and disturb their harmony.
6. We also note that similar issue was again decided by the Tribunal in the case of M/s. Paramount Centurispun Castings Ltd. v. CCE, Nagpur . In this case, the Tribunal held "The contention of the JDR that further machining carried out at the premises of the subcontractors would have to be deemed as having been carried out for and on behalf of the appellant and therefore, the casting in question would be classifiable under Chapter 84 of the Central Excise Tariff as fully machined parts has no force at all. It is well settled that goods have to be assessed on the basis of their form at the time of their clearance. In this case as observed earlier at the time of clearance the goods had undergone only the processes of heat treatment, scraping and fettling and any subsequent machining carried out at the premises of the sub-contractors or job worker resulting in an activity amounting to further manufacture would have to be deemed as having been carried out by the job worker as an independent manufacturer and the liability for payment of duty, if any, attracted on the goods undergoing such further processing would be that of the job worker." The basic facts decided upon in the above case are identical to the facts of the present case except that further machining was done at the customer's end in the present case whereas machining etc. was done by sub-contractors in the case relied upon by the Respondents herein. The Respondents have also relied upon another case viz. M/s. Venus Metal Works v. CCE, Bangalore . From the perusal of the above decision of the Tribunal, we note that the consistent view taken by the Tribunal is that fettling, grinding and heat treatment given to the castings etc. does not make the castings identifiable parts of the machine. Following this consistent vierv of the Tribunal, we hold that the products in dispute are castings and had not attained the stage of identifiable machine parts. In this view of the matter, the Appeal is rejected.
(Dictated in Court).