TMI Blog1999 (9) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000/-. The issue concerns the classification and assessment to duty of sub-assemblies of Washing Machines (alleged to be complete washing machines, though not assembled). 2. Heard Shri Laksmikumaran, ld. Advocate and Ms. Srimati, ld. Advocate for appellants and Shri S. Kannan, ld. D.R. 3. Ld. Advocate submits that the following facts are not in dispute with respect to this order impugned :- (a) The disputed items are manufactured in their factory at Whitefield, Bangalore. (b) That these items can be broadly grouped into three main sub- items namely (i) Tub Sub-assembly, (ii) Control plate assembly and (iii) the various loose parts. These loose parts amounting to 23 in number. (c) These were packed suitably and cleared on payment of duty from appellants this factory as parts machines. (d) Such consignments were re-routed to two different units in India namely their another factory near Bangalore and another factory at NOIDA in U.P. (e) At both these locations, the consignments so received were unpacked and subjected to certain processes as are detailed in the affidavit of Shri S.K. Das, Deputy General Manager, NOIDA which is on record. (f) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-7-1998 wherein, in similar circumstances, the Tribunal has concluded that interpretative rules cannot be applied to the notification and therefore where the exemption is expressly provided by a notification, even though if the item is deemed to be a complete product in terms of the Rule 2(a) of the interpretative rules, the exemption for assessment purposes given as parts cannot be denied on the grounds of applicability of Interpretative Rule 2(a). He submits that this is exactly the facts of this case. Inasmuch as that even if it is to be held, then as alleged by the Revenue what was cleared should be deemed to be a complete washing machine having essential characteristics thereof under Rule 2(a), but since actually the goods cleared were Sub-assemblies noted above, and which were claimed to be parts, therefore the exemption available to parts could not be denied even if it was held that under the deemed legal provisions of Interpretative Rule 2(a) all of them taken together would mean the clearance of a washing machine as such. Therefore, he submits that on this ground alone upto 14-3-1995 the demands does not survive. 5. For the period from 15-3-1995 to 21-8-1995, Ld. Advoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said washing machine was cleared in an unassembled condition. Therefore, clearly the provisions of Interpretative Rules 2(a) are attractable. He draws support for this conclusion from the fact that what was cleared were not a plethora of parts running into hundreds of items, which are required towards completion of a modern hi-technology washing machine but were mere three groups of Sub-assemblies. Out of these groups, the first assembly namely Tub Assembly had even the container which were normally going to do the washing, i.e. Tub, the Motor, which would be the prime mover as well as the basic structure including the legs thereof were supporting. Therefore, it cannot be said that such an integrated Sub-assembly were parts. The second sub-assembly was again a fully assembled item containing all the electric and electronic spare parts mounted on appropriate covers/panels already internally duly wired and which only needed to be connected to the Tub Sub-assembly with the help of some of the loose parts which contained the third item. He submits that even the three items are taken together, not one screw, clamp, cables or wire pieces extra was needed to complete the washing machin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of the said Interpretative Note 2(a) namely sub-heading 8450.10 and differential duty would clearly be payable from this period onwards also. 7. We have carefully considered the rival submissions and the records of the case. In view of the change in the tariff structure in the .middle of the disputed period, i.e. from 15-3-1995, we find that the issue has to be considered for the two periods, i.e. the periods of dispute upto 14-3-1995 separately and the post 15-3-1995 period separately as the law on tariff has to be applied as changed. With respect to the period of dispute ending with 14-3-1995, we find that even if it is held that the benefit of Interpretative Rule 2(a) to these clearances is attracted as argued by Revenue, then also there is great force in the submission of ld. Advocate that since there was a single tariff sub-heading covering both the washing machines as such and parts thereof and further, since the parts thereof enjoyed partial duty exemption under the relevant notifications in currency, therefore the exemption claimed under those notifications could not be denied to the appellants merely on the ground that because of application of Rule 2(a) what was cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed as spare parts under the relevant notification were not so wrongly assessed and hence no demand of differential duty arises upto 14-3-1995. 8. Coming to the period thereafter, we find that since parts of washing machines have been removed from the ambit of the sub-heading for washing machine complete, as also that there is no notification exempting such parts, therefore the demand for differential duty on these clearances, which we have already held above to be deemed as washing machines would survive on merits. It is now left only for us to consider the Ld. Advocate s arguments on limitation for this period. On a careful consideration thereof, we find substantial force in the submission of Ld. Advocate already noted above. In particular, what convinces us of the absence of intent to evade duty on the part of the appellants is the Revenue neutrality of the entire transaction on two different counts. Firstly, even if duty was payable on the deemed washing machine, the Modvat credit on entire duty paid at Whitefield unit would have been available to both at NOIDA and at Bangalore units. This was what was actually being practiced. Secondly, if the department had objected to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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