1997 (2) TMI 244 - AT - Central Excise

Appellate tribunal decisions on excisability of NI-CAD batteries & microphone classification under new tariff

The appellate tribunal set aside the Collector of Central Excise's decision on the excisability of electrically connected in-series and encased Nickel ... Manufacture - classification Issues: Classification and excisability of electrically connected in-series and encased Nickel Cadmium (NI-CAD) batteries, Classification and dutiability of microphones.Classification and Excisability of NI-CAD Batteries:The appeal involved the classification and excisability of electrically connected in-series and encased Nickel Cadmium (NI-CAD) batteries. The dispute centered around whether the process of connecting these batteries amounted to manufacturing. The appellant argued that no new product emerged, while the Revenue sought to classify the batteries differently. The Collector of Central Excise had initially found that a new product emerged due to the specific use of the batteries in walkie talkie sets. However, the appellate tribunal found the reasoning lacking clarity, emphasizing that either there is a process of manufacture or not, and the concept of manufacture is crucial for central excise duty liability. The tribunal concluded that the order regarding the batteries was not maintainable and set aside that part of the order, allowing the appeal.Classification and Dutiability of Microphones:The second issue revolved around the classification and dutiability of microphones. The Revenue had classified the microphones under a specific heading in the new tariff, while the appellant argued for a different classification. The tribunal noted that once an item is covered by a specific entry, it cannot be classified under another entry based on section notes. The adjudicating authority's decision to classify the microphones under a specific heading was upheld by the tribunal. Additionally, the tribunal refrained from passing judgment on the applicability of certain acts for a specific period. The penalty imposed on the appellant was reduced from Rs. 50,000 to Rs. 10,000 considering the circumstances of the case. Ultimately, the appeal was disposed of with the tribunal's decision on both issues.This detailed analysis provides a comprehensive overview of the judgment, highlighting the key arguments, findings, and conclusions related to the classification and excisability of NI-CAD batteries and the classification and dutiability of microphones as addressed in the legal judgment.