Customs, Excise and Gold Tribunal - Delhi
Collector Of C. Ex. vs Perfect Electric Corporation (P) Ltd. on 27 June, 1989
Equivalent citations: 1989(43)ELT653(TRI-DEL)
ORDER K.S. Venkataramani, Member (T)
1. This appeal has been filed by the Collector of Central Excise, Patna being aggrieved by the order dated 16-4-1984 passed by the Collector of Central Excise (Appeals); Calcutta. By this order the Collector (Appeals) turned down the application by the department before him to review the approval of classification list accorded by the Assistant Collector of Central Excise, Jamshedpur in regard to certain switches manufactured by the respondents herein. The respondents manufacture parts and accessories of motor vehicles. They produce, inter alia, the following 13 items :-
1. Ignition-cum-switch 7. Reversing switch
2. Stop switch 8. Socket for Inspection Lamp
3. Combination switch 9. Switch PRL
4. Piano key switch 10. Light Rotating switch
5. Main line switch 11. Dark Lamp switch
6. Push botton starter switch 12. Rotary switch
13. Head light switch Prior to 18-6-1977 these goods were classified under Tariff Item 34A of the Central Excise Tariff which was under the description "parts and accessories, not elsewhere specified of Motor Vehicles and tractors including Trailors". By the Finance Bill, 1977 Tariff Item 61 CET was introduced with the following description "Electric Lighting Fittings, namely, Switches, Plugs and Sockets, all kinds; chokes and starters for fluorescent tubes". The department took the view that as a result of the introduction of Item 61, the goods manufactured as above by the respondents became classifiable to duty under Item 61 CET. The respondents, however, filed classification list claiming classification of the goods under Tariff Item 68 which is a residuary item for goods not elsewhere specified therein. This classification list was also approved by the Assistant Collector of Central Excise, Jameshedpur on 26-2-1982 and 27-9-1982. The Collector of Central Excise, Patna sought a review of this approval by the Assistant Collector of the classification list filed by the respondents exercising the Collector's power for seeking review before the Collector (Appeals) in terms of Section 35E(2) of the CESA, 1944. The ground for such a review was that after the amendment of Section 34A w.e.f. 1-3-1979 and having regard to the existance in the tariff of Item 61 which would, according to the department, cover all these switches, it was inappropriate to classify the switches in the residuary item of Item 68 CET. The department, therefore, sought to classify these goods, namely, switches under Item 61 CET w.ei. the date of introduction of that item in the Tariff on 18-6-1977. The Collector (Appeals) further found that there was not ground for revising the Assistant Collector's approval of the classification and observed that the various switches in question are electric in nature and they are not normal Electric Lighting Fittings which is evident from the fact that none of the switches mentioned is available with dealers in electric goods and that these switches are only available with the shops selling parts and accessories of automobile vehicles. He also noted that these products have all along been classified as parts of motor vehicles till 1-3-1979.
2. Shri L.C. Chakraborty, the learned J.D.R. appearing for the Appellant Collector submitted that in Tariff Item 61 the expression Switches, Plugs and Sockets (all kinds) is wide enough to include all kinds of switches and sockets. The enduse thereof, namely, that these are meant for automobiles is not relevant. What is relevant is the Tariff description itself in which the learned D.R pointed out that there is no reference to the enduse of the goods. He cited in this connection the case of Indian Aluminium Cables v. Union of India -1985 (21) ELT (3) SC wherein the Supreme Court held that the process of manufacture of a product and the enduse of which it is put cannot necessarily be determinative of the classification of that product in a fiscal schedule like the Central Excise Tariff. What is more important, the court observed is whether the description of the article fits in with the expression used in the Tariff. He also, in this case, referred to a recent decision of the Tribunal in the case of Collector of Central Excise v. MM. Rubber Co. Ltd. -1989 (41) ELT 343 where the Tribunal held that Bus, Car, Scooter and motor cycle seats in naked form is classifiable as Latex Foam Sponge under 16(a)(i) and not under 34A of the Central Excise Tariff as Motor Vehicle Parts.
3. Shri B.B. Gujaral, the learned Counsel appearing for the respondents submitted that the 13 items involved in this case are Switches and cannot be described as Electric Lighting Fittings classifiable under Tariff Item 61 CET because these are specially manufactured according to the Automobile Manufacturers specifications and design and can be used only in motor vehicles of a particular make. They are known in the market only as Auto parts and are not available in shops dealing in Electric lighting fittings. The learned Counsel cited and relied upon the Bombay High Court judgment in the case of PMP Auto Industries v. Union of India where in a similar case the High Court held that Automobile Push Pull Switches, head light switches and stop light switches are automobile spares and not electric fittings and fall under Item 68 CET and not under Item 61 CET. He also referred to the decision of the Tribunal which followed the above Bombay High Court's decision in the case of Automotive Ancillary Services v. Collector of Central Excise, Madras to hold that Flasher Switch, Horn and Dipper switch and Head light switch are classifiable under Item 68 CET and not 61. He further pointed out that the Central Board of Excise and Customs in a letter No. 188/1/77/CX. 4, dated 21-6-1978 had intimated that switches, sockets and plugs etc. for domestic power purposes will not fall under Tariff Item 61 and that switches, plugs and sockets which are not used as electric lighting fittings were said not to fall under Tariff Item 61 vide Delhi Collectorate Trade Notice No. 57/CO/77 dated 17-6-1977.
4. In reply the learned S.D.R Shri Chakraborty pointed out that the Bombay High Court's judgment was a Single Bench decision and did not cover all the 13 switches which are in question in the present appeal. He on the other hand referred to a Bombay High Court decision in the case of Simmonds Marshal Ltd. v. CCE, in which the Division Bench of the Bombay High Court held that Nylok Self-locking net which is used as parts of automobile and ordinarily stocked in the auto spare parts market were classifiable only as nuts under Item 52 of the Central Excise Tariff and not under Item 68 of the Central Excise Tariff. The High Court held that the Tariff description was more important and should be looked to.
5. We have carefully considered the submissions made by the learned S.D.R. and the learned Counsel. In this case the question is whether the various switches as listed supra which are undoubtedly used in motor vehicles are classifiable under Item 61 or Item 68. We find that identical issue has been gone into in detail in the case of Automotive Ancillary Services decided by the Tribunal [1987 (13) ECR 1057] wherein the Tribunal had observed in para 9 with reference to the Tariff description of the Item 61 CET as follows :-
"9. We have carefully considered the facts of the case and the submissions made before us. The department holds that the impugned products are classifiable under Central Excise Tariff Item No. 61. This Tariff Item reads as follows:
Electric lighting fittings, namely, "Switches, plugs and sockets, all kinds, chockes and starters for fluorescent tubes."
There are two things to be immediately noticed as regards the description of the Tariff Item. Firstly, it does not talk of electric fitting but it talks of electric lighting fittings. An indication of what is considered as lighting fitting can be had from the fact that chokes and starters for fluorescent tubes are specifically included in the Tariff Item. The question now arises whether the impugned products can fall in such a category of products."
The Tribunal in coming to its decision that such switches are more appropriately classifiable under Item 68 CET and not under Item 61 had also relied upon the Bombay High Court's decision in the case of PMP Auto Industries v. Union of India and Ors. The facts of the case dealt with by the Bombay High Court were also similar to the present case. The court had observed that the commercial test of how the items are known in the market to the people dealing with the items is the test to be applied and the court found that on applying such a test with the switches are only motor vehicle parts and not electric lighting fittings. The Tribunal in its order in the case of Automotive Ancillary Services lad also referred to a Tariff Advice issued in 1984 that handle bar switches for motor cycles are excluded from the purview of Tariff Item 61 and classifiable under Tariff Item 68. We also find that in the case of CCE v. Brakes India Ltd. - 1989 (41) ELT 410 the Tribunal had come to the same conclusion in respect of stop light switches holding that these are not classifiable under Item 61 of CET but in Item 68 ibid again relying upon the case of PMP Auto Industries decided by the Bombay High Court and also the above stated decision of the Tribunal in the case of Automotive Ancillary Industries. Besides this the respondents here have also referred to another Tariff Advice issued by the Board and to the trade notice issued by the Collectorate, Central Excise, Delhi the effect of which is Switches, Plugs and Sockets which are not used as electric lighting fittings will not fall under Tariff Item 61. This clarification by the department is a useful pointer to the classification of the goods as it is well-settled that in interpreting a statute reference can be made to the exposition it has received from the authorities entrusted with its implementation. The reliance placed by the Appellant Collector on case law to show that it is the Tariff description that matters does not advance their case because in the case of Symmonds Marshal the court had held that the Nylock Self-locking nuts in the case considered by the court will fall under Item 52 CET and it was based on the court's observation that these nuts are meant for universal applicability and that they are merely basically fasteners having the property of holding fast. The court also observed that each case will have to be decided on the basis of the facts surrounding it. Similarly the M.M. Rubber Co. case decided by the Tribunal relied upon by the Appellant Collector was one where the Tribunal found that the products manufactured namely the latex cushions are not used directly in that form in which they are cleared from the factory in motor vehicles but had to undergo further processes like reskin and leather covering. In the circumstances, therefore, in view of the fact that these switches are admittedly designed for use in motor vehicles and following the ratio of the Bombay High Court decision in the case of PMP Automobiles which was followed by this Tribunal also in its decision in the Automotive Ancillary Services case which ratio is squarely applicable to the facts of the present case and having regard to the further fact that even the department's own interpretation was not inconsistant by the above decisions, we see no reason to interfere with the order passed by the Collector (Appeals) which is, therefore, maintainable. The appeal, in the result, is rejected. The cross-objection is in the nature of a counter to the appeal filed by the department. The respondents are not aggrieved by any portion of the order of the Collector (Appeals). Therefore, the cross-objection is mis-conceived and is accordingly dismissed.