1989 (7) TMI 258 - AT - Central Excise

Classification of Products as Cable Terminals for Duty Concession

COLLECTOR OF C. EX. Versus DOWELL’S ELEKTRO WORKS

COLLECTOR OF C. EX. Versus DOWELL’S ELEKTRO WORKS - 1990 (45) E.L.T. 96 (Tribunal) Issues Involved:1. Classification of products under the Central Excise Tariff Act, 1985.2. Eligibility for concessional rate of duty under Notification No. 160/86.3. Interpretation of 'socket' in the context of trade parlance versus dictionary meaning.Detailed Analysis:1. Classification of Products under the Central Excise Tariff Act, 1985:The primary issue revolves around the classification of the products manufactured by the respondents, which include Cable Terminals and Sockets, Wire pins, In-line connectors, Ferrules, and Snap-on terminals. The respondents classified these products under Chapter sub-heading No. 8548.00 with a duty rate of 15% ad valorem. However, the appellants argued that these products should be classified under Chapter sub-heading No. 8536.90, attracting a higher duty rate of 20% ad valorem.The Assistant Collector initially classified the products under sub-heading 8536.90, relying on the HSN Explanatory Note under Chapter Heading No. 85.36. The appellants supported this classification by referencing the dictionary definitions of 'socket' from Chambers 20th Century Dictionary and the Concise Oxford Dictionary, which describe a socket as a 'hollow into which something is inserted.'2. Eligibility for Concessional Rate of Duty under Notification No. 160/86:The respondents did not contest the classification under sub-heading 8536.90 but sought a concessional duty rate of 15% ad valorem under Notification No. 160/86. The Collector (Appeals) granted this concessional rate, stating that the products did not fall under Serial No. (i) or (ii) of Entry No. 13 of the Notification. The appellants challenged this decision, arguing that the products should be classified as 'sockets' and thus not eligible for the concessional rate.The respondents argued that their products are not sockets but cable terminals, as understood in trade parlance and supported by ISI specifications (IS-8309:1976). They emphasized that their products are parts of electrical equipment and not electrical equipment themselves.3. Interpretation of 'Socket' in the Context of Trade Parlance versus Dictionary Meaning:The Tribunal had to decide whether to rely on the dictionary meaning of 'socket' or its meaning in trade parlance. The respondents' counsel argued that the Tribunal should consider the technical meaning and the common usage in trade practice, as supported by ISI specifications and the Explanatory Notes issued by the Customs Cooperation Council.The Tribunal noted that the products manufactured by the respondents are used in various applications, such as transformers, switchgears, railways, electricity boards, rectifiers, and small electrical instruments. These products are distinct from conventional sockets, which are typically used in electrical circuits and covered by ISI specification No. 1293:1967.The Tribunal referred to several judgments, including the Bombay High Court's decision in Advani Oerlikon Ltd. v. Union of India, which emphasized the importance of interpreting terms in fiscal statutes based on their popular meaning or the meaning attached to them by those dealing in them, rather than their scientific or technical definitions.Conclusion:The Tribunal concluded that the products manufactured by the respondents could not be classified as sockets based on their dictionary meaning. Instead, they should be understood in the context of trade parlance and their common usage in the industry. Therefore, the respondents' products are not sockets but cable terminals, and they are entitled to the concessional rate of duty at 15% ad valorem under Notification No. 160/86.The appeal was dismissed, and the order of the Collector (Appeals) Bombay was upheld. The Tribunal emphasized that the meaning of terms in fiscal statutes should be based on their commercial sense and usage in trade, rather than relying solely on dictionary definitions.