1995 (2) TMI 204 - AT - Central Excise

Tribunal decision: Steel balls classification upheld, exemption denied for certain sizes.

PRATAP ENGINEERING WORKS Versus COLLECTOR OF CENTRAL EXCISE, JAIPUR

PRATAP ENGINEERING WORKS Versus COLLECTOR OF CENTRAL EXCISE, JAIPUR - 1995 (78) E.L.T. 472 (Tribunal) Issues Involved:1. Classification of polished steel balls under the new Central Excise Tariff.2. Eligibility for exemption under Central Excise Notification No. 62/86-C.E. and No. 162/86-C.E.Issue-wise Detailed Analysis:1. Classification of Polished Steel Balls:The appellants, engaged in manufacturing steel balls of varying diameters, initially classified their goods under Item No. 68 of the old tariff, claiming exemption as cycle parts. Post-28-2-1986, with the introduction of the new tariff, they sought classification under Heading No. 87.14 (parts and accessories of cycles) and claimed exemptions under Notification Nos. 62/86-C.E. and 162/86-C.E. The Revenue, however, classified the goods under sub-heading No. 8482.00 (ball or roller bearings) as per Note 6 to Chapter 84 of the new tariff. The Assistant Collector of Central Excise upheld this classification, stating that the polished steel balls met the criteria outlined in Note 6 to Chapter 84. The Collector of Central Excise (Appeals), New Delhi, confirmed this classification upon appeal.2. Eligibility for Exemption:The crux of the matter was whether the steel balls qualified for exemption under Notifications No. 62/86-C.E. and 162/86-C.E. The Tribunal noted that under the old tariff, the goods were classified under Item No. 68, which provided specific exemptions for cycles and parts. However, under the new tariff effective from 28-2-1986, the classification rules became more detailed and comprehensive to reduce disputes. The appellant's claim for classification under Heading No. 87.14 was rejected based on the interpretation of Note 6 to Chapter 84, which specifically classified polished steel balls under Heading No. 84.82.Detailed Considerations:The Tribunal examined the predominant use of the steel balls in cycles and the detailed classification rules under the new tariff. The Assistant Collector of Central Excise, Jaipur, had classified the goods under sub-heading No. 8482.00 based on their polished nature and specific dimensions as per Note 6 to Chapter 84. The Tribunal affirmed this classification, noting that the rules of interpretation and chapter notes are crucial for determining the correct classification.The Tribunal also considered the appellant's admission that their steel balls were polished, as evidenced by their written submissions and application. The process of polishing, including barrelling, was scrutinized, and the Tribunal concluded that the steel balls met the criteria for classification under Heading No. 84.82.Exemption Analysis:The Tribunal analyzed the exemptions under Notifications No. 62/86-C.E. and 162/86-C.E., noting that these exemptions did not cover goods classified under Heading No. 84.82. The Tribunal emphasized the strict construction of exemption provisions, as held by the Supreme Court in previous cases. Consequently, the polished steel balls of sizes 3/16', 5/32', and 1/8' were not eligible for exemption.Exception for 1/4 Inch Balls:The Tribunal found that the steel balls of size 1/4 inch did not meet the criteria under Note 6 to Chapter 84 due to the variation in maximum diameter. Thus, these balls were classified under Heading No. 73.08, which allowed for exemption if they were for cycles or cycle rickshaws.Conclusion:The Tribunal rejected the appeal for steel balls of sizes 3/16', 5/32', and 1/8', confirming their classification under Heading No. 84.82 and ineligibility for exemption. However, the appeal was accepted for steel balls of size 1/4 inch, classifying them under Heading No. 73.08 and granting exemption if used for cycles or cycle rickshaws. The appeal was disposed of accordingly.