1987 (9) TMI 173 - AT - Central Excise

Classification of Automotive Switches under Central Excise Tariff: Tribunal Rejects Department's View

The tribunal determined that certain automotive switches, including flasher switches, horn and dipper switches, and combination switches, are properly ... Electric lighting finings Issues Involved:1. Classification of Automotive Switches2. Commercial Parlance and Trade Classification3. Retrospective Duty Demand4. Applicability of Notification No. 309/79Issue-Wise Detailed Analysis:1. Classification of Automotive Switches:The primary issue revolves around the proper classification of certain automotive switches (flasher switch, horn and dipper switch, and head-light switch (combination switch)) under the Central Excise Tariff. The lower authorities classified these switches under Tariff Item No. 61, whereas the appellants argued for classification under Tariff Item No. 68. The tribunal considered the specific functions of these switches, noting that they are not general-purpose electric switches but parts of motor vehicles. It was determined that the flasher switch, which indicates the direction of the vehicle, does not provide illumination. The combination switch, although it includes a headlight switch, primarily serves multiple functions such as energizing the horn, ignition, wiper, and fuel gauge. The horn and dipper switch, which alters the beam of the headlights and operates the horn, was not considered a lighting switch.2. Commercial Parlance and Trade Classification:The tribunal emphasized the importance of commercial parlance and how the products are identified by the class or section of people dealing with or using the product. The products in question are not known as general-purpose electric goods but as motor vehicle parts, available with dealers in motor vehicle parts only. The tribunal referenced the Supreme Court's decision in Atul Glass Industries Ltd., which highlighted that the functional character of a product and its identification in trade parlance are crucial for classification. The tribunal concluded that the impugned products are not known or dealt with in the trade as electric lighting switches.3. Retrospective Duty Demand:The appellants argued that even if the goods were correctly classifiable under Tariff Item No. 61, duty could not be demanded retrospectively as the assessment and clearance had been approved by the department, with no allegations of suppression of facts or fraud. The tribunal agreed with this argument, stating that duty could only be demanded from the date of the Show Cause Notice.4. Applicability of Notification No. 309/79:The appellants also sought the benefit of Notification No. 309/79, dated 4-2-1979. However, this issue was raised only before the Collector (Appeals) and had not been addressed by the Assistant Collector or the Collector (Appeals). The tribunal noted that the appellants could agitate this issue before the proper authority if they deemed fit.Separate Judgment by Member (J):Member (J) concurred with the reasoning of Member (T) regarding the combination switches and horn-dipper switches. However, he expressed a different view regarding the flasher switch, suggesting that it could be considered a lighting switch as it illuminates a part of the vehicle to indicate the direction of the turn. Despite this, he ultimately concurred with the order of Member (T) in light of the Bombay High Court decision in 1987 Vol. 31 E.L.T. 369.Conclusion:The tribunal held that the impugned goods are excisable under Item 68 of the Central Excise Tariff, rejecting the department's classification under Item 61. The decision was fortified by the Bombay High Court's ruling in P.M.P. Auto Industries Ltd. v. Union of India & Others. The tribunal also noted the department's earlier clarification that handlebar switch assemblies should be classified under Tariff Item No. 68, supporting the appellant's position.