TaxTMI 
TaxTMI 
2017 (9) TMI 945
X X X X Extracts X X X X
X X X X Extracts X X X X
....rtain enquiries entertained a view that the appellants are not discharging applicable central excise duty on various items which are subjected to different process in the PDC. Proceedings were initiated against the appellant to demand and recover central excise duty not paid on such activities on various items claimed to be components, spares of automobile. The period of dispute is 1.6.2002 to 31.5.2006. The original authority on completion of adjudication, held that the appellant is liable to pay central excise duty of Rs. 2,04,76,495/- and also imposed penalty of equal amount under section 11AC of Central Excise Act, 1944. 3. The ld. counsel for the appellants submitted that the dispute relates mainly on lubricating oil, adhesive kits, coolants, emblem radiator grill and cap assembly oil filter, audio players with or without speakers and radio assembly, bulbs, switches, fuses and relays. He summarized the position of the appellant as below:- Product Classification as Per Department Assessees contention 1.6.2002 to 28.2.2003 1.3.2003 to 31.5.2006 Lubricating Oil 2710 Demand under S. 2(f)(ii) Chapter Note not attracted Demand under section 2(f)(iii) Part ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....esent case also. 6. The ld. counsel contested the demand on limitation and also for imposition of equal amount penalty. He submitted that as could be seen from the proceedings, the whole issue is relating to interpretation of deemed manufacture as admittedly, the appellants are not involved in regular manufacture of these items. Further, the dispute involving classification with an implication on manufacture and the existence of PDC with the nature of activities carried down by the appellants are well within the knowledge of the department and there is no question of invoking suppression, willful mis-statement etc. in this case. He submitted that the original authority did not substantiate the allegation for confirmation of extended period. 7. The ld. AR contested the appeal on various grounds. He submitted that Section Note 2 to Section XVI is very clear to the effect that parts which are goods specifically covered under the said Chapters of the said Sections are to be classified in respect of Headings only. He submitted that the manufacturer of these items from whom the appellant purchased classified them under Chapter 85. It is not open to the appellant to reclassify the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pto the period 1.3.2003. We note that lubricating oils, adhesive kits, coolants etc. will be covered under Schedule III which figures the respective entries finding place in the said Schedule which is applicable with effect from 1.3.2003. As such, we hold that the appellant is liable to duty of their activities in respect of three products from that date. 10. The next point of dispute is relating to emblem radiator grill, cap assembly oil filter, audio players with or without speakers, bulbs, switches, fuses and relays. The Revenue classified these items under Chapter 39 and 85 and demanded duty from the appellant on the ground that they are liable to discharge duty as a manufacturer with effect from 1.3.2003 in terms of Schedule III r/w section 2(f)(iii). The appellant contended that they are liable to duty only with effect from 1.6.2006 after the introduction of Sl.No. 100 in the said Schedule and not prior to that date. As such, the whole issue boils down to classification of these products and thereafter the concept of deemed manufacture as per Schedule III will apply. We note that audio players with or without speakers, radio assemblies are sound reproducing equipments whic....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Concern Pvt. Ltd. (supra) dealt with classification of wind screen wipers, head lamps of all kinds and classify the same under Heading 8512 and switches and starting switches, changeover switches for electric vehicles were classified under Heading 85.36. We note that the appellant relied on GS Auto International Ltd. (supra) and also contended that they did not deal with heading 8512. We have perused the Apex Court decision in G.S. Auto International Ltd. (supra). The Apex Court observed as below:- "15. The question that needs to be adverted to is: whether the goods in question can appropriately be classified under Tariff Item 52 or not having been specified elsewhere, they fall under Tariff Item 68. In construing these items, what is the proper test to be applied Is it the functional test or is it commercial identity test which would determine the issue. It seems to us that this question is no longer res integra. It fell for consideration of this Court earlier and it was laid down that the true test for classification was the test of commercial identity and not the functional test. It needs to be ascertained as to how the goods in question are referred to in the market b....