J.B.A. Printing Inks Ltd. etc. Vs. Collector of Central Excise, New Delhi
EmailAppeal: Civil Appeal No. 1905 of 1997 (From the Judgment and Order dated 22.7.96 of the Central Excise, Customs & Gold (Control) Appellate Tribunal, New Delhi in A. No. E/4106/89-C in (Order No. 450/96-C))
WITH
Civil Appeal Nos. 601-602 of 1998 (From the Judgment and Order dated 23.5.97 of the Central Excise, Customs & Gold (Control) Appellate Tribunal, Madras in A. Nos. E/SB/5345/MAS and E/SB/5481/91-MAS.)
WITH
Civil Appeal Nos. 601-602 of 1998 (From the Judgment and Order dated 23.5.97 of the Central Excise, Customs & Gold (Control) Appellate Tribunal, Madras in A. Nos. E/SB/5345/MAS and E/SB/5481/91-MAS.)
Petitioner: J.B.A. Printing Inks Ltd. etc.
Respondent: Collector of Central Excise, New Delhi
Apeal: Civil Appeal No. 1905 of 1997 (From the Judgment and Order dated 22.7.96 of the Central Excise, Customs & Gold (Control) Appellate Tribunal, New Delhi in A. No. E/4106/89-C in (Order No. 450/96-C))
WITH
Civil Appeal Nos. 601-602 of 1998 (From the Judgment and Order dated 23.5.97 of the Central Excise, Customs & Gold (Control) Appellate Tribunal, Madras in A. Nos. E/SB/5345/MAS and E/SB/5481/91-MAS.)
WITH
Civil Appeal Nos. 601-602 of 1998 (From the Judgment and Order dated 23.5.97 of the Central Excise, Customs & Gold (Control) Appellate Tribunal, Madras in A. Nos. E/SB/5345/MAS and E/SB/5481/91-MAS.)
Judges: S.P. BHARUCHA, R.C. LAHOTI & N. SANTOSH HEGDE, JJ.
Date of Judgment: Jan 12, 1999
Appearances:
Mr. V. Sridharan, Mr. Shekhar Vyas, Mr. A.R. Madhav Rao, Mr. K. Srinivas and Mr. V. Balachandran, Advocates for the appellants.
Mr. H.N. Salve, Solicitor General, Mr. Dilip Tandon, Advocate with him for the Respondent.
Head Note:
EXCISE
Central Excise Tariff Act, 1985
Entry 84.79 and 84.09 – Radiators – Show cause notice for differ-ential duty on re-classification – Demand on same basis but for subsequent period. Held that in view of 1999 JT 1999 (7) SC 477 notices for subsequent period cannot be quashed. (Para 5)
Central Excise Tariff Act, 1985
Entry 84.79 and 84.09 – Radiators – Show cause notice for differ-ential duty on re-classification – Demand on same basis but for subsequent period. Held that in view of 1999 JT 1999 (7) SC 477 notices for subsequent period cannot be quashed. (Para 5)
Entry 84.79 and 84.09 – Radiators – Reclassification – Earlier, radiators treated as accessories of internal combustion engines – Later classified as “parts suitable for use solely or principally with engines under heading 84.07 or 84.08. Held that since inter-nal combustion engine cannot function without cooling device, such device must be held as part of engine.
Held:
The argument on behalf of the appellants is that radiator assemblies are not parts of internal combustion engines but accessories thereof and this had been accepted by the respondents earlier. It is difficult to accept this latter argument and the argument that an internal combustion engine can function without a cooling device. It cannot do so. If, then, the cooling device is water based, being the radiator, that cooling device must be held to constitute a part of such engine. (Para 7)
Cases Reffered:
1. Collector of Central Excise, Baroda v. Cotspun Limited, JT 1999 (7) SC 477
JUDGEMENT:
BHARUCHA, J.
Civil Appeal No. 1905 of 1997 :
1. We have read the order under appeal and heard the learned counsel. We are of the view that a more detailed consideration of the case on either side is required and that there should be categoric findings of the Tribunal in this behalf. Since counsel on either side are agreed that this is the appropriate course to follow, we do not elaborate.
2. The civil appeal is allowed. The order under appeal is set aside. The appeal (No. E/4106/89-C) is restored to the file of the Tribunal at New Delhi to be heard and disposed of afresh, after giving to either side the opportunity to file further evidence and a hearing. The appeal shall be disposed of expe-ditiously.
3. No order as to costs.
Civil Appeal Nos. 601-602 of 1998
4. The appellants are manufacturers of radiators. Their radiators were treated as accessories of internal combustion engines and classified under the residual entry, sub-heading No. 84.79 of the excise tariff. On 16th July, 1992, a demand was raised in the show cause notice issued to them which recorded this fact. It stated :
“On a review taken about the classification of the above goods, it appears that the present classification of ‘Radiator Assembly” an accessory of I.C. Engines of various models, the product of M/s. Fine Automotive and Industrial Radiator Private Limited, appears to be incorrect and merits reclassification under chapter sub heading No. 8409.00 considering the function of the product as the Radiator assembly appears to be a part suitable for use solely or principally with engine, which attracts BED at 20% adv.”
On this basis, the appellants were asked to show cause why the differential amount of duty in the sum of Rs. 4,12,172/- for the period 1st January, 1992 to 30th June, 1992 should not be paid by them “being the duty resultant due to reclassification……from chapter heading 8479.00 to 8409.00 of the Schedule to the Central Excise Tariff Act, 1985”.
5. The first contention is, and it is not in dispute, that the demand made by this show cause notice must be quashed because the issue in this behalf is covered by the constitution Bench judg-ment in Collector of Central Excise, Baroda v. Cotspun Limited, JT 1999 (7) SC 477, where it was held:
“13. The levy of excise duty on the basis of an approved clas-sification list is the correct levy, at least until such time as to the correctness of the approval is questioned by the issuance to the assessee of a show cause notice. It is only when the correctness of the approval is challenged that an approved clas-sification list ceases to be such.”
For the reason stated in para 13 above, the demands in the two subsequent show cause notices on the same basis, but for the subsequent periods of time, cannot be quashed.
6. This reason the issue of the correctness of the new classifi-cation. The classification was under Tariff entry 84.79 on the basis that what the appellants manufactured was an accessory of an internal combustion engine and it was sought to be changed to a classification under Tariff entry 84.09 on the basis that that radiator assembly was a part suitable for use solely or princip-ally with such engines.
7. Tariff entry 84.09 covers “parts suitable for use solely or principally with the engines of heading No. 84.07 or heading No. 84.08”. Entry 84.08 covers “compression-ignition internal combus-tion piston engines (diesel) or semi-diesel engines)”. The argu-ment on behalf of the appellants is that radiator assemblies are not parts of internal combustion engines but accessories thereof and this had been accepted by the respondents earlier. It is difficult to accept this latter argument and the argument that an internal combustion engine can function without a cooling device. It cannot do so. If, then, the cooling device is water based, being the radiator, that cooling device must be held to consti-tute a part of such engine.
8. In the result, except in relation to the demand made in the show cause notice dated 16th July, 1992, which stands quashed, the civil appeals are dismissed.
9. Any deposit that has been made by the appellants in respect of the demand that is quashed will now stand adjusted against the demands made by the two remaining show cause notices.
10. If the appellants claim any Modvat benefit for themselves or their customers in this behalf, the claim shall be decided in accordance with law.
11. No order as to costs.
Civil Appeal No. 1905 of 1997 :
1. We have read the order under appeal and heard the learned counsel. We are of the view that a more detailed consideration of the case on either side is required and that there should be categoric findings of the Tribunal in this behalf. Since counsel on either side are agreed that this is the appropriate course to follow, we do not elaborate.
2. The civil appeal is allowed. The order under appeal is set aside. The appeal (No. E/4106/89-C) is restored to the file of the Tribunal at New Delhi to be heard and disposed of afresh, after giving to either side the opportunity to file further evidence and a hearing. The appeal shall be disposed of expe-ditiously.
3. No order as to costs.
Civil Appeal Nos. 601-602 of 1998
4. The appellants are manufacturers of radiators. Their radiators were treated as accessories of internal combustion engines and classified under the residual entry, sub-heading No. 84.79 of the excise tariff. On 16th July, 1992, a demand was raised in the show cause notice issued to them which recorded this fact. It stated :
“On a review taken about the classification of the above goods, it appears that the present classification of ‘Radiator Assembly” an accessory of I.C. Engines of various models, the product of M/s. Fine Automotive and Industrial Radiator Private Limited, appears to be incorrect and merits reclassification under chapter sub heading No. 8409.00 considering the function of the product as the Radiator assembly appears to be a part suitable for use solely or principally with engine, which attracts BED at 20% adv.”
On this basis, the appellants were asked to show cause why the differential amount of duty in the sum of Rs. 4,12,172/- for the period 1st January, 1992 to 30th June, 1992 should not be paid by them “being the duty resultant due to reclassification……from chapter heading 8479.00 to 8409.00 of the Schedule to the Central Excise Tariff Act, 1985”.
5. The first contention is, and it is not in dispute, that the demand made by this show cause notice must be quashed because the issue in this behalf is covered by the constitution Bench judg-ment in Collector of Central Excise, Baroda v. Cotspun Limited, JT 1999 (7) SC 477, where it was held:
“13. The levy of excise duty on the basis of an approved clas-sification list is the correct levy, at least until such time as to the correctness of the approval is questioned by the issuance to the assessee of a show cause notice. It is only when the correctness of the approval is challenged that an approved clas-sification list ceases to be such.”
For the reason stated in para 13 above, the demands in the two subsequent show cause notices on the same basis, but for the subsequent periods of time, cannot be quashed.
6. This reason the issue of the correctness of the new classifi-cation. The classification was under Tariff entry 84.79 on the basis that what the appellants manufactured was an accessory of an internal combustion engine and it was sought to be changed to a classification under Tariff entry 84.09 on the basis that that radiator assembly was a part suitable for use solely or princip-ally with such engines.
7. Tariff entry 84.09 covers “parts suitable for use solely or principally with the engines of heading No. 84.07 or heading No. 84.08”. Entry 84.08 covers “compression-ignition internal combus-tion piston engines (diesel) or semi-diesel engines)”. The argu-ment on behalf of the appellants is that radiator assemblies are not parts of internal combustion engines but accessories thereof and this had been accepted by the respondents earlier. It is difficult to accept this latter argument and the argument that an internal combustion engine can function without a cooling device. It cannot do so. If, then, the cooling device is water based, being the radiator, that cooling device must be held to consti-tute a part of such engine.
8. In the result, except in relation to the demand made in the show cause notice dated 16th July, 1992, which stands quashed, the civil appeals are dismissed.
9. Any deposit that has been made by the appellants in respect of the demand that is quashed will now stand adjusted against the demands made by the two remaining show cause notices.
10. If the appellants claim any Modvat benefit for themselves or their customers in this behalf, the claim shall be decided in accordance with law.
11. No order as to costs.
