2019 (11) TMI 954

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.... manufacture of machinery parts. The primary issue in this dispute is if the items manufactured by the appellant falling under chapter heading 7326 or under chapter 84. 3. Learned Counsel pointed out that a Show cause notice was issued to the appellants seeking to demand duty on the goods manufactured by them and seeking to dispute the classification 7308.90 of Central Excise Tariff Act, 1985 claimed by the appellant. He pointed out that the show cause notice claims that the appellant were manufacturing machine parts of chapter 84 as they were also engaged in using the drilling process apart from the following: (a) Removal of runner and risers (b) Surface cleaning and removal of surface defects (c) Chippings of runner grinding to rem....

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....f sub-heading 7307 (prior to 1-3-1988) of the CET. (iii) The validity of Board's Circular 1/87 (F. No. 139/48/86-CX. 4 dated 18-2-1987 and the need to amend and modify it. The matter has been examined. Under the old CET (prior to 1-8-1983) there was two stage levy as castings under T.I. 25 and on final machining as finished machine under T.I. 68. This position has been upheld by the Hon'ble Supreme Court in the case of M/s TISCO v. Union of India - 1983 (35) ELT 605. In the subsequent period upto 27-2-1986 the position of two stage under T.I. 25(16) and 68 continued. After the introduction of new CET, the chapters on metals were not aligned with HSN during the period 28-2-1986 to 29-2-1988 and continued to be based on the earlier T.I.....

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....for heading 73.25 at page 1037. Such castings as they emerge from the moulds or after fattling etc. would be appropriately regarded as semi finished articles having the essential character of the finished machine parts as a blank for machine parts which be application of Rule 2(a) of the Rules of Interpretation would be classified, under Chapter 84, 85, 86, 87 etc. After alignment of CETA with HSN, this position would also prevail under CETA with HSN, this position would also prevail under CETA, 85 w.e.f. 1-3-1988." [Based on M.F. (D.R.) letter F.No. 139/7/88-CX.4, dated 28-7-1989] He pointed out that the SCN has been issued essentially on the ground that the process of drilling is not one of the processes specified in the Circular and t....