TaxTMI 
TaxTMI 
1995 (4) TMI 150
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....ponent parts namely idlers, pulleys and structurals are manufactured in the factory of the assessee and certain other bought out items like electric motors, gear box, belting switches, coupling etc. are assembled at the site of the customers to form conveyors, stackers/reclaimers. The Department found that the appellants have paid duty on the items manufactured in their factory namely idlers, pulleys and structurals at the rate of 15% ad valorem under sub-heading 8428.00 Central Excise Tariff. A statement was given on 28-10-1986 by Shri D.R. Purohit, the Assistant Manager (Finance) of the appellants. He stated inter alia that the bought out items are generally never brought into the factory but are assembled at the site directly. He further stated it was not at all possible to make complete assembly of conveyor system in the factory and then to despatch and to attach it to the earth. He stated that their products like conveyors and stackers/reclaimers are tailor-made system. He said that they classified parts of conveyors produced by them like idlers and pulleys which are cleared as replacement parts under sub-heading 8431.00 Central Excise Tariff Act. When these are cleared for us....
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....o the site for assembly and not brought into their factory. The learned Counsel urged that the appellants were clearing certain parts which were components of conveyors etc. and when these parts are inter-connected by transmission devices like conveyors belt at the site of the customers they together contribute to the clearly defined function of material handling equipment covered by Heading 84.28 Central Excise Tariff Act. The learned Counsel also pleaded that this was the situation in which classification has to be done in accordance with the Rule 2(a) of the interpretative rules for the Tariff. This rule lays down inter alia that a reference in a heading to goods shall be taken to include a reference to those goods removed in unassembled or disassembled condition when they have the essential characteristics of the finished goods. Therefore, the contention is that simply because the machines manufactured by the appellants are removed in unassembled or disassembled condition, it would not change the essential characteristics of the goods manufactured and removed by them. The learned Counsel further argued that in any case the demand is hit by limitation because the show cause noti....
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....ay v. Hydranautics Membrane (India) Ltd. to say that classification of the goods depends on the condition at the time of clearance and the form in which they are presented for assessment and the end-use of the goods presented for clearance is not material for classification. 4. The submissions made by both the sides have been carefully considered. The question in both these appeals is whether the goods cleared by the appellants could be classified under 84.28 as conveyors, stackers/reclaimers considering them as removal of such machinery in unassembled or disassembled form by applying Rule 2(a) of Interpretative Rules to the Central Excise Tariff Act, 1985. This Rule reads as follows :- "2(a) Any reference in a heading to goods shall be taken to include a reference to those goods incomplete or unfinished, provided that, the incomplete or unfinished goods have the essential character of the complete or finished goods. It shall also be taken to include a reference to those goods complete or finished (or falling to be classified as complete or finished by virtue of this rule), removed unassembled or disassembled". The goods in question which are manufactured and cleared f....
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....ponding complete machine even if presented without that motor." "Unassembled Machines For convenience of transport many machines and apparatus are transported in an unassembled state. Although in effect the goods are then a collection of parts, they are classified as being the machine in question and not in any separate heading for parts. The same applies to an incomplete machine having the features of the complete machine [see Part (IV) above], presented unassembled (see also in this connection the General Explanatory Notes to Chapters 84 and 85). However, unassembled components in excess of the number required for a complete machine or for an incomplete machine having the characteristics of a complete machine, are classified in their own appropriate heading". Clearly, the idlers, pulleys and structurals cleared by the appellants from their factory cannot by themselves be called a collection [of] part the conveyor system, stackers/reclaimers. Nor can these parts be said to be assembly of parts of such advanced stage as to be considered as having the main essential features of the complete conveyor, stacker/reclaimer at the time of clearance. The form in which the goods are clea....