1987 (8) TMI 327 - AT - Central Excise

Tribunal Upholds Assessment of Studs & Eye Bolts, Raises Concerns on Inconsistent Findings

SREE VEERARAGHAUA INDUSTRIES Versus ADDITIONAL COLLECTOR OF C. EX.

The Tribunal affirmed the assessment of studs and eye bolts under Item 52 of the Central Excise Tariff, dismissing the appeal against the Additional ... Classification Issues:Assessment of studs and eye bolts under Item 52 of Central Excise Tariff; Misdeclaration of goods under Tariff Item 68; Demand of duty and penalty imposition.Assessment of Studs and Eye Bolts under Item 52:The dispute revolved around whether studs and eye bolts should be considered fasteners assessable under Item 52 of the Central Excise Tariff. The appellant argued that studs, being plain rods with threads at both ends, and eye bolts, used in various applications like gland valves and brake assemblies, were not fasteners. However, the department contended that both items fell under the definition of fasteners. The Tribunal analyzed the nature and function of studs, emphasizing that even without accompanying nuts, studs were still fasteners as they bind and fasten two pieces together. The absence of nuts did not negate the fastening capability of studs. The Tribunal also highlighted that the tariff item included 'screw stud' and referred to 'bolts and nuts,' indicating that studs were indeed fasteners. Similarly, eye bolts were deemed to fall under Item 52 due to their role in binding and fastening components in various applications, such as gland valves and brake systems.Misdeclaration of Goods and Demand of Duty:The Additional Collector found that the studs and eye bolts were misdeclared under Tariff Item 68 without the necessary Central Excise license, leading to clearance without duty payment after reaching the exemption limit. However, there was inconsistency in the Collector's order regarding the misdeclaration of studs and the demand for duty. While the Collector acknowledged misdeclaration for eye bolts, the demand for duty was restricted to a specific period for studs, raising questions about the application of extended time limits under Rule 9(2) of the Central Excise Rules. The Tribunal noted the Collector's contradictory statements and questioned the rationale behind restricting the duty demand for eye bolts despite finding suppression and clandestine clearance. Ultimately, the Tribunal upheld the duty payment but remitted the penalty due to uncertainty surrounding the suppression and clearance issues.In conclusion, the Tribunal affirmed the assessment of studs and eye bolts under Item 52 of the Central Excise Tariff, dismissing the appeal against the Additional Collector's order. However, it raised concerns about the Collector's inconsistent findings regarding misdeclaration and duty demands, highlighting the need for clarity and consistency in such adjudications.