TaxTMI 
TaxTMI 
2022 (9) TMI 674
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion to any goods in the Section or Chapter notes of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture; or (iii) Which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labeling or re- labeling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer, and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account." 1.3 The Serial No. 100 and 100A of the said Third Schedule of the Central Excise Act, 1944 reads as follows:- Sr.No Chapter, heading, Subheading or tariff item Description of goods Abatement as a percentage off retail sale price 100 Any Chapter Parts, components and assemblies of vehicles (including chassis fitted with engines) falling under Chapter 87 excluding vehicles falling under Heading 8712,8713, 8715....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g Limited - 2019 (370) ELT 859 and in the case of J.K Tyre and Industries Limited - 2017 (358) ELT 1044. Learned counsel for the appellant argued that assuming that bearings imported by the Appellant have dual usage viz. Industrial and Automotive (as claimed by the department) even than they are not be considered as parts and components of automobiles in view of orders of this Hon'ble Tribunal in the case of J.K Tyre. He argued that the learned Commissioner has proceeded on the assumption that the imported bearing have their end use also in automotive sector and in the absence of any specific marking as to ascertain their usage clearly sustains the belief that bearings are mostly used in automotive or parts of automobiles. This assumption is contrary to the ratio of cited judgments of this Hon'ble Tribunal. 2.3 Learned Counsel for the appellant argued that the Learned Commissioner held that the Bearings are parts of automobiles relying upon clarification dated 16.12.2018. He argued that no findings are recorded that the imported goods bearings are parts of the goods described in sr.no.100A of the Third Schedule. The sole basis of covering Bearings under both sr. no. 100 and 100A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed to customs duty including CVD as Bearings under hearing 84.82 of the First Schedule to the Customs Tariff Act and duty having been charged with reference to the transaction value and not based on MRP, the very same Bearings cannot be assessed as parts, components and assemblies of automobiles (as held by the learned Commissioner) under the Central Excise Act and to invoke section2 (f) (iii) read with Third Schedule to the Act and demand duty of excise. Learned Counsel for the appellant argued that without prejudice and in any event, in the event the imported Bearings are held to be covered under notification issued under section 4A of the Act then in that event demand can only be for alleged short levy of CVD under section 28 of the Customs Act and not under Section 11 A of the Act. 2.8 Learned Counsel for the appellant argued that the DGCEI during the investigation recorded statements and collected data in form of letters of the various dealers of the Appellants. These statements and letters clearly show that Bearings are not for use in the automotive sector except a stray case of use of bearings of 2 codes in two wheelers. Learned Counsel for the appellant argued that the D....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 21st May, 2015 was specifically asked whether the bearing has dual application viz. industrial and automobile usage and he answered that bearings have only industrial usage. v. Mr. Bhikhamchand Choraria, Partner of M/s. Sunrise Bearing Corporation in his statement dated 22.5.2015 was specifically asked whether the bearing has dual application viz. industrial and automobile usage and he answered that bearings have only industrial usage. vi. Mr. Amit Shastri - Branch Manager of M/s. Premier (India) Bearing Ltd. in his statement dated 12th October, 2015 was specifically asked whether bearing has dual application viz. industrial and automobile usage and he answered that bearings have only industrial usage. He further stated that he had given details of Industrial Customers in pen-drive on the same day vide his letter dated 10.10.2015. vii. Mr. Vimal Kumar Gupta - Authorized Person of M/s. Industrial Engineering Services in his statement dated 19.10.2015 was specifically asked whether the bearing has dual application viz. industrial and automobile usage and he answered that bearings are sold to industrial dealers and have only industrial usage. viii....
X X X X Extracts X X X X
X X X X Extracts X X X X
....imported by the Appellant had only industrial usage. xv. Mr. Hemant N Shah- Proprietor of M/s. Isha Enterprises in his statement dated 12thDecemeber, 2015 was specifically asked whether the bearing has dual application viz. Industrial and automobiles usage and he answered that bearings are sold to industrial distributors and have only industrial usage. xvi. Mr. Anshul Ramesh Zanzari- Director of M/s. Shri Sanmati Automobiles Pvt. Ltd. in his statement dated 18th November, 2016 he stated that he had not purchased any bearings used in two wheelers from the Appellant or Premier Bearing. However, he agreed that he had used bearing having code no, 6204 and 6202 was used in two wheelers. 2.11 Learned Counsel for the Appellant argued that except in one case, bearings of two codes sold by Premier India Bearing to M/s. Mohra Trading Company, which in turn sold two of the bearings to Sanmati Automobiles Private Limited, which are claimed to have been used in two wheelers. 2.12 Learned Counsel for the Appellant argued that evidence in form of the dealers and others clearly shows that bearings are only for industrial use only. The single incident of use of bearing in tw....
X X X X Extracts X X X X
X X X X Extracts X X X X
....earings have only industrial use and not meant for automobile use. He argued that the appellant imported bearing in the following packing:- (a) Single Packing Bearing (b) Bulk Packing Bearing (c) Sleeves/bearing in bulk (without boxes) The single packing bearing are only affixed with the retail sale price to comply with Legal metrology Act. Bulk packing bearing are also in individually package at the time of import. They are imported in bulk in pallets and taken out from different pallets and after affixing MRP using MRP fixing guns they are repacked in the corrugated boxes on which packing slip is affixed. The imported sleeves/bearing in bulk are packed in individual package and after affixing MRP are then repacked in the bigger corrugated boxes. He argued that the MRP is affixed in single packing and bulk packing bearings to comply with provisions of Legal Metrology Act and otherwise not covered by section 2(f)(iii) of the Act. 2.16 Learned Counsel for the Appellant argued that invocation of extended period of limitation is in the facts of the case untenable. The Appellant was registered as dealers. The Appellant's understanding that imported bear....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... any other treatment on the goods to render the product marketable to the consumer, and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account." In terms of the clause (iii) of aforesaid definition " Packing or repacking of such goods in a unit container or labeling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer" amounts to manufacture. The goods on which the clause (iii) of sub- section 2(f) of the Central Excise Act, 1944 applies are listed in the Third Schedule of the Central Excise Act, 1944. 4.2 The Serial No. 100 and 100A of the said Third Schedule of the Central Excise Act, 1944 reads as follows:- Sr.No Chapter, heading, Subheading or tariff item Description of goods Abatement as a percentage off retail sale price 100 Any Chapter Parts, components and assemblies of vehicles (including chassis fitted with eng....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cation 49/2008 was amended by the Notification No. 19/2010- CE(N.T) dated 29.04.2010 and following entry was introduced. Sr.No Chapter, heading, Subheading or tariff item Description of goods Abatement as a percentage off retail sale price 109 Any Chapter Parts, components and assemblies of goods falling under tariff item 84264100, headings 8427,8429 and subheading 8430 10 30 4.6 The appellants are manufacturers of bearings. The appellants also import bearing and sell the same after re-packing. The issue in dispute is if these "bearings" imported and repacked by appellant are covered by Sr. No. 100 and 100A of the Third Schedule of the Central Excise Act, 1944 and the Activity of "packing or re-packing of such goods in a unit container or labeling or re- labeling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer" amounts to manufacture. If it is held that the product manufactured by the appellant is covered by Sr.No. 100 or 100 A of the Third Schedule then the same would be liable to assessment under section 4 A in terms of Sr. n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bearings imported by the Appellant are either parts or components of vehicles falling under Chapter 87 (excluding vehicles falling under Heading 8712,8713, 8715 and 8716) or parts, components of goods falling under tariff item 84264100, Headings 8427, 8429 and sub-heading 843010. The appellant have relied on Note 2 and Note 3 of Section XVII which covers vehicles, aircraft , Vessels and associated transport equipment which defines the terms "Parts" and "Parts and Accessories" . The note 2 and Note 3 reads as follows:- 2. The expression "parts" and "parts and accessories" do not apply to the following articles , whether or not they are indentifiable as for the goods of this Section: (a) --------------- (b) ---------------- (c) -------------------- (d) -------------------- (e) machines and apparatus of headings 8401 to 8479, or parts thereof, other than the radidators for the articles of this Section, articles of heading 8481 or 8482 or, provided they constitute integral parts of engines and motors, articles of heading 8483; (f) ----------------------------- (g) ------------------------------ (h) -------....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules : (a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings; (b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517; (c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548." It is seen that Section Note 2 (a) clearly states that parts which are goods falling under any of the heading of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e under the provisions of Section 4A without substantiating such claim with some concrete evidences. In view of the above, we find that ball bearings are not included under relevant notifications issued under Section 4A of the Central Excise Act, 1944 and therefore, same cannot be considered for assessment on the basis of MRP value. While holding the above view, we also take shelter of following case laws which are cited by the Learned Advocate, State of Tamil Nadu v. Vinyl Cable Industries (supra) where Hon‟ble High Court has observed as under :- 6. It is well settled that a particular use to which a single article is put alone is not conclusive to know the real nature or character of the article that will determine how to identify it for the tax purpose. As noticed by the Tribunal, the Revenue authorities identified these cables as electrical goods for all purposes, except that in the matter of sale of such cables to automobile parts dealers, they wanted to impose a tax rate of 13 per cent treating only such sales as sale of parts and accessories of motor vehicles and trailers in entry 3 of the First Schedule. The revenue authorities evidently committed an error of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g with a sales tax matter the Hon‟ble Supreme Court in United Copies (India) Pvt. Ltd. v. Commissioner of Sales Tax reported in 1997 (94) E.L.T. 28 (S.C.) held that rubber flaps cannot be classified as accessories of motor vehicles. The Court also refer to Central Excise Tariff Act and mentioned that flaps are taxable under Tariff Heading 4012. 4.It is also brought to our notice that in the case of appellant‟s unit in Mysore, similar dispute arose. The Commissioner (Appeals) vide his order No. 228/2010, dated 22-10-2010, following the earlier appellate order dated 14- 5-2010, which was accepted by the Department, held that tyres, tubes and flaps manufactured by the appellant‟s unit at Mysore is not to be assessed under Section 4A as parts of automobile. It is to be noted here that tyres and tubes are not only used for automobiles. They are used in animal drawn vehicles, aircrafts and various other machineries. As such even on this ground, it is not tenable to hold the tyres and tubes are to be considered as parts and components of automobiles." In the background it is apparent that the goods roller and ball bearings would be classified under heading 84....