2004 (97) ECC 678 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

South Zonal Bench : Chennai

Shri P.G. Chacko, Member (J) and Shri Jeet Ram Kait, Member (T)

Commissioner of Central Excise, Coimbatore

Versus

Lakshmi Card Clothing Manufacturing Co. Ltd.

Appeal No. E/1208/1998

[Arising out of Order-in-Appeal No. 459/97 (CBE), dated 25.11.1997 passed by Commissioner of Central Excise, Coimbatore]

Final Order No. 521/2004, dt. 1.6.2004, Certified on 30.6.2004

Classification (C. Excise)

Chapter Heading 8448.00 of CETA -- Machines used in textile mills -- What this machine does is replacement of worn-out card clothing on a carding cylinder. This is a function which is discharged only at times when the worn-out part of the carding cylinder requires to be replaced. The function of the machine in question is not one integrally connected with the continuous process of manufacture with which the carding cylinder is associated. The classification of the machine under Heading 84.79, as a machine having independent function, is appropriate.

PRESENT :

Shri C. Mani, JDR for the appellant.

Shri S. Murugappan & Smt. Prameela Viswanathan, Advs. for the respondent.

Cases Cited :

1. Business Forms Ltd., 2002 (83) ELT 15 (SC)................................................... [Para 3]

2. Woodcraft Products Ltd., 1995 (50) ECC 122 (SC)........................................... [Para 3]

Per : P.G. CHACKO, (Oral)

This appeal of the Revenue involves a classification dispute. It is against an order of the Commissioner (Appeals) classifying a few machines manufactured and cleared by the assessee to textile mills during 1990-91. Ld. Commissioner (Appeals) classified all the machines under Heading 84.48 of the Schedule to the Central Excise Tariff Act, 1985. The department wanted the goods to be classified under Heading 84.79. Going by the grounds of appeal, we note that the challenge in this appeal is in respect of classification of only one of the machines namely, "MACHINE FOR MOUNTING CARD CLOTHING ON CARDING CYLINDERS", though Ld. DR asserts that classification of all the machines is in dispute. The claim of the DR does not appear to be correct in view of what is extracted below from the grounds of appeal:

"The observation of the Commissioner (Appeals), that the machines are not having any independent functions but they are textile machinery used in the card room and they exactly fitted in the system and cannot be used separately which qualified to the classified under Ch. Hg 8448.00 is not correct since the above machinery are used for mounting card clothing on carding cylinder and merit classification only under 8479.00 as per HSN explanatory note explained above."

2. All the machines referred to in the impugned order are found to be mounting machines, each of which is used to mount new part/component (replacing old, worn-out part/component) on one or the other textile machine. Among these machines, only one machine is used for "mounting card clothing on carding cylinders" and it is the classification of this machine which is in dispute in the present appeal. The classification of the other machines will stand as decided by the Commissioner (Appeals).

3. Regarding classification of machines for "mounting card clothing on carding cylinders", we have heard both sides. Ld. DR submits that this machine has an independent function i.e., replacing worn-out card clothing on carding cylinder and, therefore, it cannot be considered to have a function auxiliary to any textile machine of Headings 84.44 to 84.47. This function of the machine is not one integrally connected with the process of manufacture with which any of the machines covered by Headings 84.44 to 84.47 is associated. It is further submitted that the HSN Notes on Heading 84.79 classified the machine in question squarely under the said Heading. The DR refers to item No. 13 (machines for mounting card clothing on carding cylinders) under Part III (Miscellaneous machinery) of HSN Notes on Heading 84.79. Ld. Counsel for the respondents submits that the relevant Show-cause Notice had not relied on any HSN Note. It is argued that, when the Tariff heading is clear, there is no room for taking the aid of HSN Notes. According to Ld. Counsel, Heading 84.48 is functionally specific for the machines in question inasmuch as, according to him, the function of replacing worn-out card clothing on carding cylinders is auxiliary to the function of the carding cylinders. These arguments have been countered by the DR in his rejoinder. Relying on the Supreme Court's judgments in the cases of Woodcraft Products Ltd., 1995 (50) ECC 122 (SC) : 1995 (77) ELT 23 (SC) and Business Forms Ltd., 2002 (83) ELT 15 (SC) : 2002 (142) ELT 18 (SC); Ld. DR submits that explanatory notes to HSN are not only of persuasive value but also are entitled to great consideration in classification of goods under the Central Excise and Customs Tariffs. The Heading 84.48 does not specifically cover the machine in question. On the other hand, Heading 84.79 specifically covers it as per the HSN notes. Hence, according to Ld. DR, the machine can only be classified under Heading 84.79.

4. We have given careful consideration to the submissions. We note that the machine in question is not one specifically mentioned under Heading 84.48 of the Tariff Schedule, nor is there any specific mention of the machine in the list of items given under HSN Heading 84.48. On the other hand, HSN Heading 84.79 specifically mentiones the machine in question at S. No. 13 of Part III of the Explanatory Notes to the Heading. Hence, as rightly contended by the DR, the machine should be appropriately classified under Heading 84.79 of the CETA Schedule. His reliance on the Apex Court's ruling on the applicability of HSN Explanatory Notes to Central Excise Tariff entries is quite apposite. This apart, we have not been impressed by Ld. Counsel's argument that the function of this machine is ancillary to the function of a carding cylinder. What this machine does is replacement of worn-out card clothing on a carding cylinder. This is a function which is discharged only at times when the worn-out part of the carding cylinder requires to be replaced. The function of the machine in question is not one integrally connected with the continuous process of manufacture with which the carding cylinder is associated. In this view of the matter, the classification of the machine under Heading 84.79, as a machine having independent function, is appropriate. Thus, the Revenue's appeal is well-founded and we allow the same, after setting aside the lower appellate authority's order to the extent it relates to classification of "machine for mounting card clothing on carding cylinders".

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