TMI Blog2009 (3) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 - Dated:- 25-3-2009 - S/Shri T.K. Jayaraman, Member (T) and M.V. Ravindran, Member (J) Shri G. Shiva Dass, Advocate, for the Appellant. Ms. Sudha Koka, SDR, for the Respondent. [Order per: T.K. Jayaraman, Member (T)]. - The following appeals involve a common question of law and facts. Therefore, they are taken up together for disposal. The details of the appeals are given in the tabular column below :- Sl. No. Appeal No. Name of the Parties Impugned Order No. Date Period of dispute 1. E/597/2006 M/s. BHEL v. CC CE (Appeals), Hyderabad OIA No. 03/2006 Dt: 27-2-06 ( De novo ) 1986-87 to date 2. E/1040/2006 -do- OIA No. 49/2006 Dt: 19-7-2006 1991-1993 3. E/1041/2006 -do- OIA No. 50/2006 Dt: 19-7-2006 1983-84 to 1996-97 4. E/1264/2004 -do- OIA No. 73/2004 Dt: 27-7-2004 1984-85 to 1997-98 2. Shri G. Shiva Dass, the learned Advocate, appeared on behalf of the appellants and Smt. Sudha Koka, the learned Departmental Representative for the Revenue. 3. We heard both sides. 4. The issue involved in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispatched in knocked down condition is cleared on payment of duty proportionate to the value and as per the billing schedule agreed to by the appellants with the buyer. The sum total value on which duty is paid is equal to the total contract value less erection charges. The appellants discharge the duty liability on Kg basis. That is, the appellants determine the total weight of the consignment, which is being dispatched by them and determine the value per Kg. On this value, the appellants discharge the duty liability while clearing the various components. In fact, the provisional assessment is resorted to because the contract with the customers has got a price variation clause. Once the supply under the contract is completed, the appellants arrive at the final contract value which excludes for the purpose of payment of excise duty, the value of the bought out components supplied directly to the site of the customer. The actual dispute is relating to the classification of the Turbo Generating Sets. It was stated that the TG Set comprises normally of Gas Turbines, Steam Turbines, Generators and Heat Exchanger. These are all manufactured in various sections of the appellants' unit. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chinery for classification purpose and not as parts. The following case-laws were relied on :- (a) CCE, Coimbatore v. Servall Engineering Industries - 2004 (168) E.L.T. 125 (Tri.-Chennai) (b) CCE, Coimbatore v. ACC Machinery Co. Ltd. - 2004 (165) E.L.T. 201(Tri.-Chennai) (c) CCE, Chennai v. Conveyor Equipments (P) Ltd. - 2001 (127) E.L.T. 478 (Tri.-Chennai) (d) CC (Prev.), Gujarat v. Reliance Petroleum Ltd. - 2008 (227) E.L.T. 3 (S.C.) = 2008 (86) RLT 505 (SC) (e) Tata Iron and Steel Co. Ltd. v. UOI and Others - 1988 (33) E.L.T. 297 (Pat.) (f) Boving Fouress Ltd. v. CCE, Chennai - 2006 (202) E.L.T. 389 (S.C.) (g) Sulzer Flovel Hydro Ltd. v. CCE, Delhi-II - 2004 (176) E.L.T. 195 (Tri.-Del.) (h) Vishwa Industrial Co. (P) Ltd. v. CCE, Calcutta-II - 1999 (107) E.L.T. 774 (Tribunal) (i) CCE, Madras v. Southern Conveyors (P) Ltd. - 2000 (123) E.L.T. 639 (Tribunal) (j) CCE, Delhi-III v. B.H.P. Engineers - 2000 (119) E.L.T. 599 (Tribunal) (k) Vinar Systems Ltd. v. CC, Calcutta-II - 2001 (131) E.L.T. 578 (Tri.-Kolkata) In all these cases, it has been settled that classification of goods has to be with reference to contracts entered into with the customers. If the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g line. He only says that these parts and components did not constitute such a mill or line at the time of clearance (emphasis ours). We have already dealt with this point. The reliance by the Commissioner upon the decision of the tribunal in Punjab Breweries Ltd. v. Collector - 1985 (22) E.L.T. 573, that the condition of the article at the time of clearance from the factory would be a material factor for deciding the tariff entry is misplaced. The tribunal decision is concerned to classification of fermentation gas under the earlier Central Excise tariff. It was not relevant to classification of goods in pursuance of the current tariff in which the interpretative rules, especially those relating to classification of unassembled or disassembled goods are significant. 19. It has therefore to be held that the goods were classifiable as rolling mills/galvanizing line and not its parts thereof. We must note that two other decisions of the Tribunal independently have come to the same conclusion. In Shrike Construction Equipments Pvt. Ltd. v. CCE, Pune - 1997 (95) E.L.T. 644 the Tribunal has held that what was cleared by the appellant before it was cranes, and not parts of cranes, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s cleared by the respondents from time to time against a single purchase order constituted Paper making machines classifiable under CH 8439.10 of the First Schedule to the Central Excise Tariff Act. However, Revenue contended that the complete machine was not in existence in the factory when the first clearance of parts was made. Only parts of the machinery were cleared every time and hence, the same were not to be classified as a complete machine under CH 8439.10. The Tribunal did not accept such a view. Shri Shiva Dass stated that this is the latest decision and is also exactly on the point to be decided in this case. 5.5 An alternative submission was made by the learned Advocate that the Department has raised the demand of duty by classifying all the goods cleared as parts of the TG Sets without determining whether the said items can be capable of being classified separately under any other respective individual headings. It was stated that Note 2(a) of Section XVI of the Central Excise Tariff Act, 1985 specifies that parts, which are goods included in any of the headings of Chapter 84 or 85 other than 84.85 and 85.48, are in all classes to be classified under respective headi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be assessed as Parts of such machine at their time of clearance from the factory. 6.1 Further, she relied on the decision of the Eastern Bench, Kolkata, in the case of Idicol Piping Engg. Works Ltd. v. CCE C, Bhubaneshwar-I - 2008 (226) E.L.T. 147 (Tri.-Kolkata) wherein it has been held that when there is a piecemeal clearance over a period of one and half years and when such parts have been manufactured over a longer period of time, each such part cleared/presented does not have the essential character of the complete machinery. It was further held that the individual consignment should be classified as parts in conformity with the General Interpretative Rule 2(a). She stated that this decision is directly on the point at issue and it has also considered the decision of the Tribunal in Flat Products Equipments (I) Ltd. (cited supra). 7. It was contended by the learned Advocate that the Circular dated 15-1-2002 of the Board is not relevant here because the same was issued in a different context for demand of duty when the demand of duty was raised on final products emerging as immovable property. That Circular cannot be used to classify the impugned items as parts of the TG s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et and not as Parts. This logic is not acceptable. If it were possible to assemble the entire thing in one go and dis-assemble only for the purpose of transportation, this problem would not have arisen at all. In the very nature of the manufacture of the item, there is so much difficulty in manufacturing it as one piece and then dis-assembling it. It should be borne in mind that the TG set consists of various sub-assemblies. The contract entered is for the supply of TG set and not for the Parts. No doubt, the entire thing will be assembled at the customer's site but the clearance is only in respect of the various components. However, having in mind the Rules of Interpretation 2(a) and also the Chapter Note 4 of section XVI, it should be considered that the appellants cleared only the TG set albeit over a period of time. Therefore, classification of the items should be only Turbo Generator Set in knocked down condition. This principle has been applied in the various decisions cited by the learned advocate. 8.2 Especially, we have to agree with the learned advocate that the ratio of the Flat Products Equipments India Ltd. decision of the Tribunal, which was quoted supra by the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the factory of the appellants in 26 (twenty-six) consignments over a period of nearly one and a half years during 18-7-1995 to 4-12-1996. It is clear from the Despatch Details that parts of KG-9 and KG-10 weighing various quantities have been supplied over this long period and the appellants have also indicated the amounts separately for each consignment. In this connection, we have also perused the relevant General Interpretative Rule 2(a) which reads as follows :- "2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled." We find that the aforesaid Rule permits classification of machinery under the Headings specific to the machinery, even when it is incomplete or unfinished, provided that, as presented (emphasis ours), the incomplete or unifinished article has the essential char ..... X X X X Extracts X X X X X X X X Extracts X X X X
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