TaxTMI 
TaxTMI 
2006 (12) TMI 272
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....t the assessee has mis-classified their product manufactured by them namely parts of lifts & escalators classifiable under Chapter sub-heading 8431 as lifts and escalators under Chapter sub-heading 8428 though they were removing only parts of lifts & escalators. Proposal also included invocation of penal action and demand of interest. (iii) On receipt of show cause notice dated 29-3-1995, the assessee had filed a W.P. bearing No. 909 of 1995 in the Hon'ble Bombay High Court, which was finally disposed of by an order dated 27-8-2002, permitting the Commissioner to adjudicate upon the SCN dated 29-3-95 and to decide the same in accordance with law, after following principle of natural justice. (iv) The Commissioner vide his order dated 20-1-03 has ordered the finalization of classification of the parts cleared for erecting of the lifts & escalators etc. under Chapter 8431 and accordingly confirmed the demand as proposed in the show cause notice. 4. The learned Advocate for the appellants challenged the order of the Commissioner inter alia on the following grounds :- (i) They are entering into contracts with their customers for supply of lift/escalator wh....
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....company by taking us through the affidavit dated 25-6-90 filed by the appellant before the Collector (Appeals) and made the following submissions :- (i) The classification list filed by them under Rule 173B mentions the items manufactured by them as parts indicating the part nos. the price lists filed under Rule 173C is for each part indicating the part no. The RT-12 returns filed under Rule 173G also furnishes quantities in terms of parts manufactured and cleared. The parts manufactured by them are cleared either for maintenance purpose in which case they are paying duty treating them as parts and classifying them under Chapter 8431 and when they are cleared under the contract for assembling the lifts/escalators they are claiming them as a lift or escalator and seeking classification under Chapter 8428. (ii) The parts are cleared over a period of time to their own site office and for this purpose they are filing the price list in Part VI(B) Format treating the clearances as for captive consumption and not in Part-II Format as applicable to contract price. (iii) Before the Hon'ble High Court Bombay in the WP No. 3276 of 1987 filed by the party on matters ....
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....refore, seeking particulars of commissioning and erection charges received by the petitioners from their customers does not arise at all. If there is any dispute regarding the excisability of the parts of the lifts under Tariff Item 84.28 or 84.31, the respondents may proceed in the matter in accordance with law as this aspect of the matter will need investigation and adjudication based on questions of fact for which writ jurisdiction cannot be allowed to be invoked." (iv) They are manufacturing only parts or components; each part is a complete item in itself. They are neither incomplete nor unfinished. They have acquired the essential character of parts of machine. They have not acquired the essential character of lifts/escalators/lifting machinery. (v) Since the party has specified the parts by description and part No., the department is right in classifying them as parts under Chapter heading 84.31. In any case the same items when cleared for maintenance are being treated by them only as parts falling under chapter heading 8431. (vi) He relied on the following judgments :- (i) Pioneer Embroideries Ltd. v. CC, Mumbai - 2004 (178) E.L.T. 933 (Tr....
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....s according to the department they had essential characteristics of lifts and escalators. This argument did not find favour with the Hon'ble High Court. They have held that the final product lifts/escalators come into existence only at the premises of the customers and they are not excisable as they come into existence as immovable property. 8. The appellant company takes the view that valuation and classification are two distinct issues. Even though for the purpose of valuation, the Hon'ble High Court has held that the lifts/escalators come into existence at the premises of the customers, if the Interpretative Rules are applied what was cleared by them has to be classified only as lifts/escalators and not as parts or components. The claim for classification not as parts or components but as full fledged lifts/escalators arises out of the fact that the lifts/escalators carry a lower rate of duty. 9. While the Interpretative Rules are applied in determining the classification under Central Excise Law certain prior conditions are required to be applied. Under the Customs Law, any product which is entering India requires to be classified. But under Excise Law only such goods whi....