2001 (8) TMI 160 - AT - Central Excise

Summary

Issues: Classification of telescopic lighting towers under Heading 7308.20 vs. Heading 8543.00, Inclusion of the cost of lights in the assessable value, Imposition of penalty for non-registration.

Classification of telescopic lighting towers:
The primary issue in this appeal was the classification of telescopic lighting towers manufactured by the appellant. The appellant claimed classification under Heading 7308.20 for structures and parts of iron or steel, specifically towers and lattice masts. However, the Commissioner proposed classifying the goods under Heading 8543.00 as electric machines and apparatus with individual functions. The Commissioner argued that the tower's adjustability and function as a machine warranted classification under Heading 8543.00. The appellant contended that the structure being telescopic and swiveling did not change its classification as a tower made of iron and steel, falling under Heading 7308.20. The appellant's classification was ultimately accepted based on the Explanatory Notes to the Harmonised System of Nomenclature.

Inclusion of the cost of lights in the assessable value:
Another issue raised was whether the cost of the battery of lights mounted on the tower should be included in the assessable value. The appellant argued that since the tower's function was to provide illumination and the lights were integral to its purpose, the cost of the lights should be included. The Tribunal distinguished a previous case where the cost of cables for an electronic exchange was not included in its value, stating that in this case, the lights were essential for the tower's function and identity. Therefore, the cost of the lights was deemed includable in the assessable value of the tower.

Imposition of penalty for non-registration:
A penalty of Rs. 25,000 was imposed on the appellant for failing to apply for registration as required by the rules when the value of goods cleared exceeded Rs. 20.00 lakhs. The appellant excluded the cost of lights in good faith while computing the value. However, the Tribunal found this exclusion unjustified and declined to interfere with the penalty, indicating that it was not a valid reason for non-compliance with the law.

In conclusion, the appeal was allowed in part, setting aside the Commissioner's order to the extent that the classification of the telescopic lighting towers under Heading 7308.20 was accepted, the cost of lights was included in the assessable value, and the penalty for non-registration was upheld.