1985 (9) TMI 168 - AT - Central Excise

Tribunal affirms axle studs classification under Central Excise Tariff, allows exemption under specific conditions.

KWALITY SALES CORPORATION, LUDHIANA Versus COLLECTOR OF CENTRAL EXCISE, CHANDIGARH

KWALITY SALES CORPORATION, LUDHIANA Versus COLLECTOR OF CENTRAL EXCISE, CHANDIGARH - 1986 (23) E.L.T. 137 (Tribunal) Issues Involved:1. Legality of the Assistant Collector's order.2. Classification of axle studs under Central Excise Tariff Item 52 or Item 34-A.3. Applicability of the Government of India's previous order on similar goods.4. Relevance of end-use in tariff classification.5. Application of the principle of specific versus general tariff classification.6. Entitlement to exemption under Notification No. 158/71-CE.Detailed Analysis:1. Legality of the Assistant Collector's Order:The appellants contended that the Assistant Collector's order was illegal because he did not apply his independent mind and relied entirely on a trade notice. The Tribunal acknowledged that a quasi-judicial authority must apply independent judgment. However, it concluded that the appellate order was valid because the Appellate Collector independently reviewed the case records and sample, ultimately agreeing with the Assistant Collector's decision.2. Classification of Axle Studs:The primary issue was whether the axle studs should be classified under Item 52 (Bolts, Nuts, and Screws) or Item 34-A (Parts and Accessories of Motor Vehicles). The appellants argued that the axle studs were specifically designed for motor vehicles and should fall under Item 34-A. However, the Tribunal found that the axle studs, defined as 'headless bolts' with threads on both ends, fit the description of 'screw studs' under Item 52. The Tribunal cited previous cases where similar items were classified under Item 52 despite their specific use in motor vehicles.3. Applicability of Government of India's Previous Order:The appellants referred to a previous Government of India order that classified similar goods under Item 34-A. However, the Tribunal noted that classification decisions must be based on the specific facts of each case. The Tribunal found no reason to deviate from its established precedent of classifying such goods under Item 52.4. Relevance of End-Use in Tariff Classification:The Tribunal emphasized that the end-use of an article is irrelevant for classification if the tariff entry does not reference the use or adaptation of the article. This principle was supported by the Supreme Court's judgment in the case of Dunlop India Ltd. v. Union of India. Since Item 52 specifically includes 'screw studs' without reference to their end-use, the axle studs' use in motor vehicles did not affect their classification.5. Application of the Principle of Specific Versus General Tariff Classification:The appellants argued that a specific tariff item should take precedence over a general one. The Tribunal agreed with this principle but found that Item 52, which specifically mentions 'screw studs,' was more specific than Item 34-A, which generally describes 'parts and accessories of motor vehicles.' Therefore, the axle studs were correctly classified under Item 52.6. Entitlement to Exemption Under Notification No. 158/71-CE:Although the Tribunal upheld the classification of the axle studs under Item 52, it directed that the benefit of Exemption Notification No. 158/71-CE should be allowed if the appellants met the conditions specified in the notification.Conclusion:The Tribunal dismissed the appeal, affirming the classification of the axle studs under Item 52 of the Central Excise Tariff. However, it allowed for the possibility of exemption under Notification No. 158/71-CE, provided the appellants satisfied the notification's conditions.