Intel Design Systems (India) Pvt. Ltd Vs. Commissioner of
Customs & Central Excise  Insc 165 (11 February 2008)
Arijit Pasayat & Lokeshwar Singh Panta
APPEAL NO. 4564 OF 2002 Dr. ARIJIT PASAYAT, J.
Challenge in this appeal is to the order passed by the Customs, Excise and Gold
(Control) Appellate Tribunal, Fort, Mumbai (in short 'CEGAT') dismissing the
appeal filed by the appellant questioning correctness of the order in appeal
dated 27.10.1999 passed by Commissioner, Customs and Central Excise (Appeals), Pune
(in short 'Commissioner (Appeals)).
facts in a nutshell are as follows:
appellant, engaged in the manufacture of excisable goods, inter alia, filed
classification list of their products mentioned at Sr. No.1(a) to (u) of the
classification declaration with effect from 20.12.1996 claiming classification
under Chapter Heading 8710 of the Schedule to the Central Excise Tariff Act,
1985 (in short the 'Tariff Act'). The goods in the classification list were
described as parts of tanks and other armoured and motorized fighting vehicles
under Chapter Sub- Heading 8710.00 of the Tariff Act. It is the contention of
the appellants that the said goods are manufactured for Government of India,
Ministry of Defence and are used in the tanks and armoured fighting vehicles.
These goods are strictly manufactured as per drawing and design supplied by the
customer i.e. Ministry of Defence. Since the goods are manufactured for use
solely and principally for fitting into the tanks in armoured fighting vehicles
of the Defence Department, the correct classification would be under Chapter
sub-heading 8710.00. In support of their contention, they have also relied upon
the Circular No.17/90 CEX IV dated 9.7.1990 in which it was clarified that
transmission elements, switches, gears, gearing etc. do not fall under Chapter
Heading 84.83 when they are specifically designed for use in the vehicles of
Section XVII of the Tariff. In support they have submitted CT2 certificate
received from Superintendent, Central Excise, Madras wherein it was stated that said goods are classifiable
under Chapter Heading 8710. In view of the evidence, it was contended that
their classification under Chapter Heading 8710 was in order. On the other
hand, the adjudicating authority relied upon Note 2(f) to Section XVII which
excludes the goods i.e. electrical machinery and equipment falling under
Chapter 85 and since the appellants' manufacture goods such as contractors,
switches, control box etc. and are used for switching/protecting electrical
circuits or for making connections to or in electric circuits, these are parts
of electrical equipments falling under chapter sub- heading 8536.90 and CBEC
circular was, therefore, not relevant. Moreover, reliance was placed on the
interpretative Rule 3(a) which provides that specific entry shall be preferred
to the heading providing more general description.
Assistant Commissioner classified the goods under chapter sub-heading 8536.90
and confirmed the demand.
dismissed the appeal filed by the appellant.
Learned counsel for the appellant submitted that the classification list for
period in question was submitted on 9.4.1997 for the previous periods. Such
classification lists were approved. The show-cause notice was issued by the
Department proposing to levy duty under Heading 8536.90.
Department had not proved that articles fall within Heading 8536.90. It has
also relied on Circular No.17/90- CX.4, dated 9.7.1990. A note II has no
application because Department has not proved that the articles fall under
Chapter 85. Leaned counsel for the respondent supported the orders.
is to be noted that the CEGAT has held that goods are identifiable as goods
under Chapter 8536.90. The authorities have categorically held that the article
falls under Chapter 85.
per Rule 1 on Interpretive Rules, classification of excisable goods is to be
determined according to the terms of the Heading and in terms of
Section/Chapter notes. Note 2(f) to Section XVII (which governs Chapter 87)
excludes the goods viz. electrical machinery and equipment (Chapter 85). The
goods in question i.e. contractors, switches, control box etc. are the goods
used for switching, protecting electrical circuits or for making connections to
or in electric circuit. These parts/components are specifically covered under
CSH 8536.90. The CBEC Circular relied upon by the assessee is not relevant.
per the Explanatory Notes to HSN the parts falling under Chapter Heading 8710
would be covered under the said chapter, provided they fulfill both the
conditions i.e. they must be identifiable as being suitable for use solely or
principally for such vehicles and that they must not be excluded by the
provisions of Notes to Section XVII. The identifiable parts under the said
heading bodies of armoured vehicles and parts thereof, cover special road
wheels for armoured cars, propulsion wheels for tanks, tracts etc. As per this
requirement, the goods should not only be identifiable to be armoured vehicles,
but it should so not have been excluded by Notes to Section XVII. The Chapter
note 2(f) excludes electrical machinery and equipment falling under Chapter 85.
Notes to HSN relating to the parts and accessories excluded by Note 2 specify
items with reference to specific Chapter Heading as per (7) (a), (k) which
excludes photographs and other current collectors for electric traction
vehicles, fuses, switches and other electric apparatus of Heading No.85.35 or
85.36. The items, therefore, manufactured by the appellants are identifiable or
are in the nature of goods falling under Chapter Heading 85.36. Since these
fall under the category of excluded goods under Chapter Notes, even though they
are used specifically solely or principally with the armoured vehicles of
Chapter Heading 8710, they are classifiable under Chapter Heading 8536.90 only
as held by the adjudicating authority.
appeal is therefore sans merit, deserves dismissal which we direct.