2000 (10) TMI 337 - AT - Central Excise

Tribunal rules in favor of appellant on duty classification & exemption

The Tribunal ruled in favor of the appellant in a case concerning the classification of goods for duty calculation and the applicability of duty exemption ... SSI Exemption - Value of clearances Issues: Classification of goods under specific tariff headings, applicability of Notification 175/86 for duty exemption, correct interpretation of classification for duty calculation.In this case, the appellant manufactured various goods like component units of automatic data processing systems, peripherals, cards for central processing units, and switch mode power supply. The appellant filed a classification list indicating monitors, keyboards, and video terminals under heading 84.73, computer systems under heading 84.71, and switch mode power supply under heading 85.43, claiming benefit under Notification 175/86 for duty exemption. The department disputed the classification of switch mode power supply under heading 84.73, which would increase the duty liability due to exceeding the exemption limit. The appellant argued that monitors and keyboards should be classified under heading 84.71, reducing the duty liability. The Collector upheld the duty demand based on the initial classification list. However, the Tribunal found monitors and keyboards rightly classifiable under heading 84.71, rejecting the department's classification under 84.73. The Tribunal also noted discrepancies in the department's calculations, further supporting the appellant's position.The Tribunal emphasized that correct classification is crucial for determining duty liability, irrespective of the appellant's initial classification indication. The Tribunal clarified that the department's inclusion of switch mode power supply under the wrong heading affected the duty calculation. Additionally, the Collector's argument that the total value under one chapter exceeded the exemption limit was deemed irrelevant since the notification considered clearances based on separate headings, not chapters. Consequently, the Tribunal concluded that the appellant was entitled to the benefit of the notification, either based on the initial classification list or the correct classification of goods. The duty demand was deemed unsustainable, leading to the allowance of the appeal and setting aside of the impugned order.