2003 (1) TMI 700

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....il Appeal Nos. 5701-5705 of 2001, filed by the Revenue, is from final judgment and Order in Appeal Nos. E-289-293/1988-D, dated January 9, 2001. All these twenty appeals relate to the Assessment Years 1979 to 1986, albeit, for different periods. Civil Appeal No. 5711 of 1999 is filed by the Revenue, dissatisfied by the final judgment and order of the C.E.G.A.T. in Final Order No. 351/99-B in Appeal No. E/2483/1992-B passed on April 6, 1999 and it relates to the Assessment year 1986-87. 2. In the order impugned in the first set of appeals, the Tribunal applied the functional test and classified those thirty two items, manufactured by the assessee, under Tariff Item 52 of the First Schedule to the Central Excise Act, 1944. The classification was based on the finding recorded by the Tribunal, after referring to the findings in the identical case of M/s. Hindustan Motors Limited v. Collector of Central Excise, Calcutta [Tribunal's Order No. E/333/93-D, dated 6th October, 1993 in Appeal No. E/882/85-D]. The finding reads as follows : "... the Tribunal had clearly held that goods, even though used as component parts of motor vehicles having a fastening function primarily....

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.... fact, it was held that the goods in question did not fall under Tariff Item 52 and, being virtually parts of automobile, were classifiable under Tariff Item 68. 6. On the basis of similar findings and following the principle laid down in Purewal Associates Limited (supra), the Tribunal [in the order in question in Civil Appeal No. 5711 of 1999], having regard to the change of scheme of classification of goods under the Central Excise Tariff Act, 1985 held, for the Assessment Year 1986-87, that the said goods were classifiable under Chapter Heading 87.07 and not under Chapter Heading 73.18, as contended by the Revenue. 7. Mr. S. Ganesh, learned senior Counsel appearing for the assessee, contends that inasmuch as the test laid down in Purewal Associates Limited (supra), namely, the test of commercial identity, was not available to the Tribunal when it passed the order, now subject-matter of the first set of appeals, it erred in applying the functional test and holding that the goods in question are classifiable under Tariff Item 52, as it existed prior to the commencement of the Central Excise Tariff Act, 1985 and, therefore, the order of the Tribunal is liable to be....

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....nz 10 Ton; (19) Hub Bolt & Nut Minibus; (20) Hub Bolt & Nut Square Type; (21) Hub Bolt & Nut Peyken; (22) Genuine Nuts; (23) Azle Studs with Nuts; (24) Hub Bolt & Washers; (25) Checknuts; (26) Shaft Bolts; (27) Misc. Bolts; (28) Sprint Shackle Assembly; (29) Gun Metal Bushes; (30) King Pin & King Pin Unit; (31) Fan Blades; and (32) Spring Hanger & Brackets. 11. As the controversy centres round Tariff Items 52 and 68 in the First Schedule of the Central Excise Act, 1944, it will be apt to refer them here. They read as follows :   Item No. Description of goods Rate of duty     (1) (2) (3)     52. Bolts and nuts, threaded or tapped and screws, of base metal or alloys thereof, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power. Fifteen per cent ad valorem       Explanation:- The expression "Bolts and nuts, threaded or tapped and screws" used in this item shall include bolt ends, screw studs, screw studding, self-tapped screws, screw hooks and screw rings.       Item No. Descrip....

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.... valves;         (iv) Gaskets;         (v) Nozzles and nozzle holders;         (vi) Pistons;         (vii) Piston rings;         (viii) Gudgeon pins;         (ix) Circlips;         (x) Shock absorbers;         (xi) Sparking plugs;         (xii) Tin-walled bearings;         (xiii) Tie rod ends;         (xiv) Electric horns;         (xv) Filter elements, inserts and cartridges.         Explanation I : - The expression "Motor vehicles" has the meaning assigned to it in Item No. 34. Explanation II : - The expression "Tractors" shall include agricultural tractors.     14. ....

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....edule, they must be construed and understood as in common parlance and words used by the Legislature must be given their popular sense, namely that sense people conversant with the subject matter with which the statute was dealing would attribute to it. Applying the test of commercial parlance for identity of the goods and referring to the observation of this Court in Plasmac Machine Mfg. Co. Pvt. Ltd. v. Collector of Central Excise [1991 (51) E.L.T. 161 (S.C.)], it was held that the goods were classifiable under Tariff" Item 68. The other appeal dealt with thirty two articles of different kinds of connecting rod bolts (bolt rear wheel, bolt front wheel, etc). It is on this part of the judgment that Mr. Dileep Tandon has placed strong reliance to show that nuts and bolts even if integral parts of machinery would be falling under Tariff Item 52. It would be useful to notice here the following observation in paragraph (16) : "16. Before us the materials in question were produced and we could appreciate the conclusion that they are nuts and bolts as commonly understood though they differ in shape and are manufactured to order." 18. The Court approved the conclusion of....

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....al in Civil Appeal Nos. 4598-4612 of 1994 and were rightly classified as falling under Tariff Item 68 in Civil Appeal Nos. 5701-5705 of 2001. 22. So far as Civil Appeal No. 5711 of 1999 is concerned, the classification of goods was done under the Central Excise Tariff Act, 1985 (for the post-1986 period). The competing Heading numbers are 73.18 and 87.08, which read as under : Heading No. Sub-Heading No. Description of goods Rate of duty (1) (2) (3) (4) 73.18   Screws, bolts, nuts, coach-screws, screw-hooks, rivets, cotters, cotter-pins, washers (including spring washers) and similar articles, of iron or steel     7318.10 -Threaded articles 20%   Heading No. Sub-Heading No. Description of goods Rate of duty (1) (2) (3) (4) 87.08 8708.00 Parts and accessories of the motor vehicles of heading Nos. 87.01 to 87.05 20% 23. Now, we shall refer to the relevant notes under Sections XVII and XV respectively. Notes 2(b) and (3) of Section XVII read as follows : "2. The expressions 'parts' and 'parts and accessories' do not apply to the following....