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of <h1>Supreme Court affirms classification of pallets under Chapter Heading 7326.90, denies benefit claim under Notification No.67/95.</h1> <h3>M/s. Gajra Gears Ltd Versus Commissioner of Customs And Central Excise</h3> M/s. Gajra Gears Ltd Versus Commissioner of Customs And Central Excise - 2015 (320) E.L.T. 38 (SC) Issues:1. Classification of pallets under Chapter Heading 84.31 or 73.26.2. Eligibility of claiming benefit under Notification No.67/95-CE dated 16.3.1995.Classification Issue Analysis:The appellant's pallets, made of iron or steel, were used for material handling in their factory. The Department classified the pallets under Chapter Heading 7326.90, contending they were material handling equipment suitable for use with machinery under Heading 84.27. The Tribunal held that for classification under Heading 84.31, the goods must be a 'part' suitable for use with specific machinery. Referring to a precedent, it was established that pallets were not parts of the machinery as they were not essential for its operation. The Tribunal's decision was upheld, stating the pallets were not classifiable under Heading 84.31.Benefit Claim Issue Analysis:Regarding the benefit claim under Notification No.67/95, the Tribunal ruled that the Notification exempted capital goods as per Rule 57Q of the Central Excise Rules, 1944. The Notification also covered goods used in the manufacture of final products specified in the Table annexed. The appellant's pallets did not qualify as capital goods under Rule 57Q. Additionally, the pallets were not used in or in relation to the manufacture of final products, as they were solely for material handling within the factory. Therefore, the pallets did not fall under the exempted categories specified in the Notification. Consequently, the Tribunal's decision denying the benefit claim was upheld, and the appeals were dismissed.In conclusion, the Supreme Court affirmed the lower authorities' decisions on both issues, upholding the classification of the pallets under Chapter Heading 7326.90 and denying the benefit claim under Notification No.67/95 due to the pallets not meeting the criteria for exemption as capital goods used in the production process.
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