Classification of goods as building components, not pre-fabricated buildings, sustained duty demand while penalty was set aside.

Goods such as links, balls, foot plates, deco joints, clips, wooden panels and castor wheels were held not to have the essential character of pre-fabricated buildings under Heading 94.06, because there was no material to show that their assembly would itself result in a completed pre-fabricated building. They were treated as components under Heading 7308.90, so the duty demand was sustained. In the classification dispute, penalty was held not exigible and was set aside.

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Issues: Whether the goods manufactured by the assessee were pre-fabricated buildings classifiable under Heading 94.06 of the Schedule to the Central Excise Tariff Act, 1985, or components classifiable under Heading 7308.90 of the Tariff; and whether penalty was sustainable in a classification dispute.

Analysis: The goods manufactured were links, balls, foot plates, deco joints, clips, wooden panels and castrol wheels. These items did not, by themselves, constitute pre-fabricated buildings and did not have the essential character of such buildings. Note 4 to Chapter 94 defines pre-fabricated buildings as buildings finished in the factory or assembled on site from cleared elements, and there was no material to show that the goods would result in a pre-fabricated building on assembly. Since the classification adopted in the impugned order was correct, the demand of duty was upheld. As the dispute related to classification, penalty was found not exigible.

Conclusion: The duty demand was sustained and the penalty was set aside.

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