2001 (5) TMI 379 - AT - Central Excise

CEGAT Tribunal overturns classification decision on Train Traffic Control Systems, stresses marketability & rules

The Appellate Tribunal CEGAT, Bangalore, set aside the lower authority's classification of goods as communication equipment for Train Traffic Control ... Classification of goods Issues: Classification of goods under Heading 85.17 or 85.30In this judgment, the Appellate Tribunal CEGAT, Bangalore, dealt with the issue of classifying goods manufactured by the appellants under either Heading 85.17 or 85.30 based on the lower authority's reclassification. The Commissioner (Appeals) carefully examined the facts, findings of the Assistant Commissioner, and relevant tariff headings to determine the correct classification. The main question was whether the goods fell under 8530.00 or 8517.00. The Commissioner analyzed Section Notes applicable to goods under Chapters 84 & 85 and the explanatory notes under HSN. It was found that the goods were covered under note 2(a) of Sec XVI, indicating that goods included in any heading or sub-heading of Chapter 84 or 85 should be classified accordingly. The goods in question, being communication equipment for Train Traffic Control Systems, were classified under 85.17 based on the technical specifications and Indian Railways standards.The Tribunal heard both sides and considered the submissions. It noted that the entity in question was manufactured as per Indian Railway Standard Specification for Train Traffic Control Equipment with voice frequency signaling, indicating its use in Train Traffic Control Systems. Despite conveying voice frequency, the item was deemed akin to products under 85.30 rather than 85.17. The Tribunal highlighted that the entity was understood by Indian Railways as a Train Traffic Control System and met the required standards for such systems. However, it pointed out that the lower authority did not consider the marketability aspect or the Rules for the Interpretation of the Schedule for classification. The Tribunal emphasized that marketability is crucial in determining classification when statutory rules do not provide a clear answer. As the lower authority failed to address these aspects, the order was set aside for reevaluation.In conclusion, the Tribunal set aside the order and remanded the matter back to the Original authority for redetermining the classification after hearing the appellants. It was clarified that all other issues were kept open for the remand proceeding, and the appeal was allowed for de novo adjudication.