1993 (11) TMI 163 - AT - Central Excise

Tribunal Upheld Classification of Scooter Parts as Studs under Central Excise Tariff

The Tribunal upheld the classification of scooter parts called studs under Item 52 of the Central Excise Tariff for the period before 1-3-1986. The ... Classification Issues Involved:1. Classification of scooter parts called studs.2. Determination of the manufacturer.3. Applicability of processes like heat treatment, phosphatising, and chrome plating as manufacturing.4. Classification under the appropriate Central Excise Tariff.Summary of Judgment:1. Classification of Scooter Parts Called Studs:The primary issue in all appeals is the classification of scooter parts called studs. The Assistant Collector classified the goods as bolts and nuts under Item 52 of the Central Excise Tariff (CET), which was upheld by the Collector (Appeals). The Tribunal confirmed this classification, stating that the studs have a fastening function, which falls under Item 52 CET rather than the residuary Item 68 CET.2. Determination of the Manufacturer:The Assistant Collector held that the appellants were the manufacturers of the studs because they supplied the raw materials and specified the manufacturing process to job workers. The Tribunal agreed, noting that the job workers acted as hired labor and the property in the goods remained with the appellants throughout the process. This made the appellants the manufacturers under Section 2(f) of the Central Excises and Salt Act, 1944.3. Applicability of Processes as Manufacturing:The appellants argued that processes like heat treatment, phosphatising, and chrome plating do not amount to manufacturing. However, the Tribunal found that these processes were essential for making the studs usable and marketable, thus constituting manufacturing under Section 2(f) of the Central Excises and Salt Act, 1944. The processes were deemed incidental and ancillary to the completion of the fully finished studs.4. Classification Under the Appropriate Central Excise Tariff:For the period before 1-3-1986, the Tribunal upheld the classification of studs under Item 52 CET. However, for the period from 1-3-1986 to 1-4-1986, covered by Appeal No. E/4098/89-D, the Tribunal remanded the case to the Collector (Appeals) for re-determination under the new Central Excise Tariff Act, 1985, which is aligned with the Harmonized System of Nomenclature (HSN). The Collector (Appeals) was directed to consider the appellants' claim for classification under Heading 87.14 as parts and accessories of motorcycles, including scooters, and to provide a finding with reference to the provisions of the new tariff.Conclusion:The Tribunal upheld the orders of the lower authorities for the appeals concerning the period before 1-3-1986, confirming the classification of studs under Item 52 CET and recognizing the appellants as manufacturers. For the period from 1-3-1986 to 1-4-1986, the case was remanded for re-determination under the new Central Excise Tariff Act, 1985. The appeals were disposed of accordingly.