HINDUSTAN MOTORS LTD Vs. COLLECTOR OF CENTRAL EXCISE
LAWS(CE)-1991-11-21
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on November 15,1991

HINDUSTAN MOTORS LTD Appellant
VERSUS
COLLECTOR OF CENTRAL EXCISE Respondents

JUDGEMENT

N.K. Bajpai, Member (T) - (1.) THIS appeal is directed against the orders of the lower authorities by which they have revised the classification of two items manufactured by the appellants. These are: (a) Part No. 9190675 - Nut bearing lock (b) Part No. 9110046 - Nut King Pin Thrust Bearing
(2.) WHILE the first part is used in loaders, the second is used in dumpers. Their classification was initially approved under Item 68 of the erstwhile Central Excise Tariff but the authorities sought to classify them under Item 52 as Bolts, Nuts and Screws by issuing a show cause notice on 26 -7 -1980 under erstwhile Rule 10A read with Rule 173PP of the Central Excise -Rules and demanding duty of Rs. 32,049.70 for the period 1 -4 -1979 to 30 -6 -1980 on the ground that the classification of the two products under Item 68 was wrongly made. The show cause notice was issued by the Inspector of Central Excise for showing cause to the Assistant Collector why the duty short levied "due to wrong classification of Nuts - (i) Nut Bearing Lock S1. No. 9190675 and (ii) Nut King Pin Thrust Bearing S1. No. 9110046 falling under Tariff Item 52 - rate of duty 15% ad valorem - as Tariff Item 68 goods and adoption of central excise duty @ 8% ad valorem". The appellants submitted in the reply that as per Bombay Trade Notice No. 127/71 dated 5 -7 -1971, mere existence of threads would not render an article as a bolt, nut or screw if it is recognisable as component part of an instrument, apparatus, appliance or machine. It was also submitted in the reply that although the parts were called as Nut Bearing Lock and Nut King Pin Thrust Bearing, they are not classifiable as nuts and bolts because they are not known in the market as nuts and bolts. They arc known as only parts of their respective products i.e. Nut Bearing Lock is known as Part No. 9190675 of Spindles of Front End Loaders and Nut King Pin Thrust Bearing is known as Part No. 9110046 of spindles used in R25 off -the -Highway Rear Dumper. The Assistant Collector held that the function of the two parts was primarily as Fasteners and therefore they were correctly classifiable under Item 52. When the matter went up in appeal, Collector (Appeals) recorded the following order in para 3, the relevant portion of which is reproduced below: - "3. Regarding reclassification of nut bearing locks and nut king pin thrust bearing, it is seen from the impugned order that both those items perform the function of the fastening only and appellants have not been able to introduce any acceptable evidence to show that these nuts perform dual function and that fastening is the secondary function and that they are identifiable and essential components of motor vehicles, to warrant classification under T.I. 68. The description of excisable goods against Entry No. 52 of the Central Excise Tariff coupled with the explanation against the said Entry is so comprehensive, as to bring within its ambit all kinds of bolts, nuts and screws, irrespective of their use subsequent to manufacture or their placement in any machine or instrument by the buyer. Consequently, I see no merit in their appeal in respect of this issue." In the appeal before us, the points taken mainly are that the two parts are known by their respective product numbers and are manufactured particularly with regard to a specific specification and can be utilised only in the manufacture of spindles of the Front End Loaders and R -25 Highway Dumpers; that the parts arc not ordinarily sold in the market nor are they capable of being sold as such. It is also stated that the parts are not Nuts within the meaning of Item 52. Merely because a portion of the parts has resemblance to a 'Nut', the same cannot be said to be known or referred to as a nut. 2. Another ground taken in the appeal is that the demand issued under Rule 10A is wholly without jurisdiction inasmuch as the show cause notice was issued after the deletion of Rule 10A vide Notification No. 267/77 dated 6 -8 -1977. Since the show cause notice was issued after deletion of the said Rule, the entire proceedings were wholly without jurisdiction. In any event, the demand which relates to the period 1 -4 -1979 to 30 -6 -1980 is substantially barred by time.
(3.) ALTHOUGH the appeal also related to the classification of pistons etc. this matter was not pressed during the hearing. Shri Krishna Kumar, the learned counsel for the appellants, submitted that in order to classify a part as a 'Nut', its primary function should be for fastening. In the present case, the Nut King Pin Thrust Bearing prevents the nut from falling down; its function is not to fasten but to prevent the other item from falling. Similarly, in the case of Nut Bearing Lock, the part performs the function of locking and aligning - not fastening. He placed reliance on the decision of the Tribunal in the case of Central India Machinery Company v. Collector of Central Excise [1989 (39) E.L.T. 306] in which it was held that bogie centre pivot bolt ('pin') known as pivot bolt was classifiable under Item 68 and not under 52 since there was no rigid fastening of the wheel assembly/bogie with the under -frame or chassis of the wagon by the pivot bolt.;


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