2004 (11) TMI 407 - AT - Central Excise

Summary

Issues: Classification of goods under Central Excise Tariff Schedule - Whether CO2 cylinders cleared by appellants should be classified under Heading 28.11 or Heading 84.22.

The judgment involves a dispute regarding the classification of CO2 cylinders cleared by the appellants under the Central Excise Tariff Schedule. The appellants, manufacturers of 'Soda Makers,' argued that the CO2 cylinders should be classified under Heading 84.22 based on Section Note 2(b) to Section XVI of the CETA Schedule. They referred to a previous Tribunal case where a similar issue was settled in favor of the assessee. The Tribunal in the cited case held that the special type of cylinder filled with CO2, designed for home soda makers, should be considered a component of the soda maker and classified accordingly. The Tribunal rejected the view that the sale was primarily of CO2, emphasizing that the cylinder was essential for replenishing the CO2 in the soda maker. The judgment highlighted that the Tribunal's decision in the cited case was not stayed by any higher court and was applicable to the present case. Consequently, the impugned order was set aside, and the appeal was allowed.

The judgment delves into the interpretation of Section Note 2(b) and (4) of Section XVI of the Central Excise Tariff to determine the appropriate classification of the CO2 cylinders. It emphasizes that parts suitable for use with a particular machine are to be classified with the machines of that kind or in specific headings, as outlined in the section note. The Tribunal reasoned that the special type of cylinder filled with CO2, tailored for home soda makers, should be treated as part of the soda maker based on this section note. It rejected the argument that the sale was primarily of CO2, highlighting that the cylinder was indispensable for customers looking to replenish the CO2 in the soda maker. By applying the provisions of the section note, the Tribunal set aside the impugned order and allowed the appeal, aligning with the decision in the cited case.

The judgment also addresses the absence of any stay on the Tribunal's decision in the cited case by a higher court, indicating the relevance and applicability of that decision to the present case. The Tribunal noted that the view expressed in the previous case was directly relevant to the current dispute, leading to the setting aside of the impugned order and the allowance of the appeal. This consideration of the legal status of the previous decision underscores the consistency and validity of the Tribunal's interpretation of the classification issue concerning the CO2 cylinders, providing a strong basis for the final decision in the present case.