TaxTMI 
TaxTMI 
2009 (2) TMI 161
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....ir/paint filter 8421.10 7. Air motor 8412.10 8. Paint circulating pump 8414.80 9. Parts of Paint circulating pump 8414.99/8414.90 10. Parts of air motor 8412.90 Show cause notice was issued on 20-7-2000 proposing a change in the classification claim. It was alleged in the show cause notice that products namely spray painting booth, paint circulating system, air filter, paint filter, air motor and paint circulating pump had collective function of spraying liquid i.e. paints and form together a mechanical appliances for spraying liquids and in view of the Note 3 and 4 to Sec. XVI of the Schedule to the Central Excise Tariff Act, 1985 they merit classification under Chapter sub-heading 8424.10 during 15-3-1995 to 22-7-1996 and under Chapter sub-heading 8424.80 during 23-7-96 to 29-3-2000. It was further alleged that product namely parts of paint circulating system, parts of air/paint filter, parts of paint circulating pumps and parts of air motor merit classification as parts under Chapter Heading 8424.90 during 15-3-1995 to 22-7-1996 and under sub-heading 8424.99 during 23-7-96 to 29-3-2000 in view of Note 2 to Sec. XVI of the Schedule to the Central Excise Tariff Act. ....
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....availment of Modvat credit by the assessee's customer in respect of product listed at S. No. 1, 2 & 3 of Para 2 above. 4. Appeals have been filed both by the assessee and the revenue. While the assessee has disputed the classification in respect of products at S. Nos. 1, 2 and 3 sustained by the Commissioner (Appeals) and imposition of penalty thereon, the revenue is disputing the classification accepted by the Commissioner (Appeals) in respect of products listed at S. Nos. 4 to 10 in Para 2 above as well as reduction of penalty. 5. We shall take up the assessee's appeals first (Appeal No. E/2176/01 and E/464/02-Mum). Ld. advocate for the appellants submitted that spray painting booth is an enclosure recommended for use during painting, mainly to avoid fire hazard to other areas of shop floor as paint booth efficiently disposes of over spray generated during painting. Moreover, due to its design, it maintains flow of fresh air at operators breathing level, collects hazardous pigments in over sprayed paint and discharge clean air to atmosphere. Apart from these, the indirect advantages of spray booth are operator's comfort due to guarantee of fresh air at his breath level, improve....
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....is also not applicable as the goods in question do not perform the function of spraying and dispersing paints. They cannot be considered as parts of components of appliances of Heading 8424.10 classifiable under sub-heading 8424.80, because they themselves constitute articles covered by Chapter 84 and hence they, in all cases, are classifiable in their own appropriate heading, which is sub-heading 84.79. The parts of paint circulating system will be classifiable under Chapter Heading 8479.90 as there is specific heading for parts in that chapter heading. 7. It was further submitted that in any case penalty cannot be imposed under Rule 173Q(bbb) as penalty under this rule can be imposed only if any assessee enters wilfully any wrong or incorrect particulars in the invoices issued for the excisable goods dealt by him with intent to facilitate the buyer to avail of credit of the duty of excise or the additional duty of excise in respect of such goods which is not permissible under the Central Excise Rules. It was submitted that they have been furnishing their classification list from 1995 onwards and the classification was changed from 8424.00 to 8479 vide their classification declar....
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....n the platform provided therein. Similarly parts of paint circulating system will be classifiable under Chapter Heading 8424.99 which relates to parts of goods other than those covered by Heading 8424.10. 9. On limitation, it was submitted that though the description on the invoice was correct, the Chapter Heading was wrongly mentioned to enable the customers to avail of the Modvat credit and therefore penalty has been rightly imposed under Rule 173Q(bbb). 10. We have considered the submissions. We find that spray painting booth is not an essential item for the purpose of spraying and on query from the Bench, the assessee submitted that the sale of such booths is only required by big industrial houses for special purposes and is not ordered for along with spray gun which alone is meant for spraying liquids (paints). It was also submitted that the items are cleared individually and are not cleared together and orders are received as per the requirements of the customers. Similarly, paint circulating system is not necessary for spraying the paint as the circulation is carried out in different premises from where the paint is carried to the painting booth for the purpose of spraying....
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....Serial No. 4 to 10 of the list at para 2 are parts and components of machine system, and in view of Note 2(b) of Section XVI, are correctly classifiable under chapter, sub-heading 8424.00 as spare parts of spray painting machine system. Reference was invited to the Tribunal decision in the case of Becton Dickinson - 1998 (103) E.L.T. 177 (Tri), wherein the Tribunal has held that in matters of classification of goods, the cardinal rule is that a specific overrides the generic. The name given to the product is not relevant for classification but the actual nature of the goods and the process to which the goods received for processing had been subjected to is relevant, as has been held in the case of Collector v. Sayaji Iron Engineering Co. Pvt. Ltd. - 2000 (116) E.L.T. 300 (Tribunal). In view of this, it was submitted that Commissioner (Appeals) order is illegal and needs to be set aside. 12. Ld. advocate for the assessee submitted that parts under Chapter 84 are to be classified as per Note 2 of Section XVI subject to sub-note (a) (b) and (c). Note 2(a) says that parts which are goods included in any of the headings of Chapter 84 or Chapter 85 (other than Headings 84.85 and 85.48) ....