1994 (12) TMI 159 - AT - Central Excise

Tribunal reclassifies tool holders under Tariff Item 51A, overturns Collector's decision

The Tribunal allowed the appeal filed by the Collector of Central Excise, Coimbatore, in a case concerning the classification of tool holders. The ... Classification Issues: Classification of tool holders under Central Excise Tariff - Applicability of Tariff Item 68 vs. Item 51AIn this case, the Collector of Central Excise, Coimbatore, filed an appeal against the Order-in-Appeal passed by the Collector of Central Excise (Appeals), Madras, which classified tool holders manufactured by M/s. Indi-Carb Ltd. under Tariff Item 68 instead of Item 51A as determined by the Assistant Collector of Central Excise, Hosur. The main contention was that the Collector (Appeals) relied on an assessment practice from Hyderabad Collectorate where no units manufactured the goods in question, rendering the decision improper. The appellant argued that tool holders should be classified under Tariff Item 51A as they are tools that hold, guide, or operate working tools. The appellant compared the product to a carpenter's chisel or a ball pen, stating that even without a replaceable tool tip, the product should still be classified as a tool under Tariff Item 51A.The appellant was represented by Shri R.K. Kapoor, while the respondents were represented by Shri Koshy Chandy. Shri Kapoor supported the appellant's contentions and cited a previous Tribunal decision in Union Carbide India Ltd. v. Collector of Central Excise, which held that certain parts designed for machine tools fell under Item 51A. On the other hand, Shri Koshy Chandy argued that a tool holder is not a tool until a tool tip is fitted into it, and therefore, it should be classified under Item 68 as decided by the Collector (Appeals).Upon considering the submissions and reviewing the record, the Tribunal referred to the Union Carbide case and noted that certain parts designed for machine tools were classified under Item 51A, even though they did not have independent function until fitted into the machine tools. The Tribunal emphasized that the classification under Item 51A did not require independent function but rather being designed to be fitted into machine tools. Drawing an analogy to chisels and ball pens without blades or refills, the Tribunal concluded that the product in question, even without tool tips, should be classified as a tool under Tariff Item 51A. The Tribunal found that the goods were more appropriately classified under Item 51A(iii) as initially determined by the Assistant Collector, setting aside the Collector (Appeals) decision to classify them under Item 68. Therefore, the appeal was allowed, and the original classification under Item 51A(iii) was restored.