2012 (3) TMI 13

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.... Civil Appeal No. 5146 of 2003 1. This appeal is directed against the judgment and order passed by the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi ('the Tribunal' for short) in Appeal No. E/1661/2000-B dated 8.11.2002. 2. The classification of add-on cards and motherboards for the purpose of the Central Excise Act, 1944 and the relevant rate of duty leviable, is the core issue in this appeal. The Tribunal, in its impugned order, has come to the conclusion that add-on cards and motherboards are to be classified under Sub-Heading No. 8473.00 of the Central Excise Tariff Act, 1985 ('the Act' for short). 3. The brief history with regard to the rate of duty on add-on cards and motherboards prior to 1989, after 1989 and for ....

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....issioner/Adjudicating Authority had issued three show cause notices for different periods, inter alia, directing the assessee to pay the differential duty, since the goods which the appellant is manufacturing and effecting distribution would fall under Sub-Heading No.8473.00 and not under Sub-Heading No.8471.00. After receipt of the show cause notices, the assessee had filed its detailed reply, inter alia, contending that the goods in question are units of Automatic Data Processing Machine, and therefore, requires to be classified only under Sub- Heading No.8471.00, and that there was no justification for directing the assessee to pay the differential duty of 5% by classifying the said goods under Sub-Heading No. 8473.00. 11. The Adjudicat....

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.... learned counsel has taken us through some literature on add-on cards and motherboards. He also relies upon the decision of the Tribunal in the case of Indcheom Electronics Ltd. Vs. Commissioner of Central Excise, Chennai reported as 1997 (95) E.L.T. 580. 13. Per contra, Sh. Kaushik would submit that for a correct appreciation of Sub-Heading No. 8473.00, the machines enumerated under 8469.00 to 8472.00 requires to be taken note of. He would further submit that add-on cards and motherboards would enhance the functioning of Automatic Data Processing Machine. That being the case, he would state, they could be properly classifiable only as accessories and not as units of Automatic Data Processing Machine. The learned counsel also refers to sev....

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...." 16. We fully subscribe to the view expressed by this Court in Standard Radiators Pvt. Ltd.'s case. 17. In a commodity classification for the purpose of the Central Excise Act, it is essential that the character and uses of the commodity and its parts are considered in detail and examined thoroughly, before arriving at a conclusion. In CCE, Delhi v. Carrier Aircon Ltd., (2006) 5 SCC 596 = (2006-TIOL-69-SC-CX), this Court held:     "14......There are a number of factors which have to be taken into consideration for determining the classification of a product. For the purpose of classification the relevant factors inter alia are statutory fiscal entry, the basic character, function and use of the goods......" 18. The Tribu....

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....E.L.T. 580, has come to the conclusion that goods such as motherboards which are used in Automatic Data Processing Machine would fall under Sub-Heading No. 8471.00. 22. Before we comment on the view of CESTAT in the instant case, we intend to notice the facts in Indcheom Electronics (supra). That was an appeal filed by an assessee, wherein the assessee took the stand that machines, like motherboards, would fall under Sub-Heading No. 8471.00 and not under Sub-Heading 8473.00 as held by the Appellate Authority. Curiously, the Tribunal holds that motherboards are a part of an Automatic Data Processing Machine and thereby confirms the order passed by the Appellate Authority. However, in paragraph 16, it proceeds to hold that motherboards are p....