TMI Blog1983 (9) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... it was made to relate to specific items (15 in number), which change became effective with effect from 10-5-1979. The genesis of the dispute giving rise to the present appeal can be traced to this change in the Tariff. 3. The Department appears to have taken the view that T.I. 34A having become restrictive, covering 15 specified parts, the entry which would now be attracted to these goods manufactured by the appellant; namely, hub-bolts and nuts , required re-classification which would be T.I. 52, which applied to all `bolts and nuts , which entry, in their view, was more specific as compared to the general entry of T.I. 68 which was a residuary item, and could be considered only when the specific entry positively excluded the goods in question. 4. Consequently, a Show Cause Notice dated 3-6-1981 was issued to the appellants requiring them to show cause as to why these goods which they were classifying under T.I. 68 be not re-classified with reference to T.I. 52 and as to why differential duty amounting to ₹ 1,75,404.86 covering the period 1-11-1980 to 30-4-1981 be not recovered. The Department invoked Section 11A of the Central Excises and Salt Act, 1944 (hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basic question of classification, they further asserted that the notices which were issued to them with reference to Section 11A of the Act, were barred by time inasmuch as this section came into existence with effect from 17-11-1980 and in no case could be invoked for the period prior to said date; besides pleading, that there was no suppression of facts and that they have been openly clearing goods after submitting classification lists showing these items as falling under T.I. 68, which lists were duly approved by the Assistant Collector and further R.T. 12 Returns which were submitted regularly by the party showing clearances of the said goods under T.I. 68, were also passed after assessment of duty with reference to said entry and consequently the demand could not now be raised covering the past clearances. 7. These notices were disposed of by the Assistant Collector of Central Excise, Kakinada by order dated 21/24-8-1982 whereby he considered the replies filed by the party to both the Show Cause Notices and after giving due consideration to the submission made during personal hearing, came to the conclusion that the basic function performed by these hub-bolts and nuts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lution to the wheels and final movement of a motor vehicle, they had first to be securely fastened in order to achieve the desired object and so they could be treated nothing else as fasteners. He further noted that T.I. 52 did not recognise any distinction between bolts, nuts and screws used for a motor vehicle as against those bolts and nuts which the appellant described to be of general use, holding further that this T.I. 52 was more specific with reference to bolts and nuts as against the general residuary Item 68, there was thus no further place for considering the test of common parlance. As a result, the order of the Assistant Collector was upheld. 10. It is against this order that the party has filed the present appeal to the Tribunal under Section 35P of the Act assailing the order passed by the Appellate Collector, confirming the classification of the goods under T.I. 52. The statement of facts reproduced the history of T.I. 34A read with notifications issued from time to time as also the change brought into effect by the amendment in 1979. It was contended that prior to this amendment, these goods were treated as auto parts, not elsewhere specified , and that this wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heels and certain engineering features were incorporated into these bolts and nuts, and that they could not fall under the general definition of a bolt and nut. It was urged that it was in view of this clear advice that the Board had given the ruling that they were to be classified with reference to T.I. 68. The appellant also relied on some previous Orders-in-Appeal, one being that passed by the Appellate Collector, Madras in his Order-in-Appeal dated 27-11-1973 holding that these hub-bolts and nuts had a distinct functional utility, as automobile parts, and could not be treated exclusively as fasteners, and also to another order passed by the Appellate Collector of Central Excise, New Delhi in 1972 holding the same view. It was pointed out that these two Appellate Collectors had decided the issues on the same principles as enunciated by the Chairman of the Board in his note dated 14-7-1981. 12. The appellant further pleaded that the only effect of the amendment was that the parts which were first enumerated in Notification No. 71/79, dated 29-5-1971 came to be brought under the Tariff Entry itself, with the result that the remaining parts of motor vehicles which were previousl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .I. 52 was wholly unsustainable. He explained that the appellant was manufacturer of a number of automobile parts, including hub-bolts and nuts, which are being treated exclusively as auto parts. In this connection, he made reference to the catalogue issued by the appellant in respect to the products manufactured by them, including these goods, a copy whereof was placed on record, duly authenticated by him, and contended that the very specification and descriptions of these items which figure at pages 4, 8 and 11 of the said catalogue made it manifest that they were correlated only to automobiles, and had no other significance. He further emphasised that they were such specific items that even the front hub-bolt had separate specifications than that of the rear and even the one for the right wheel was different from that of the left, and that although they were threaded and tapped, they had other special engineering features which took them out of the general category of bolts and nuts, and lent them the essential character of being part of automobiles. 14. The learned Counsel further laid stress on the test of common parlance, as recognised by judicial authorities, and contende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and electric batteries respectively; the contention being that those parts of the automobiles, which have not been specified in any of the tariff heading, they had to be treated as goods not elsewhere specified . He referred to the entries in the parallel tariff, namely, Customs Tariff Act, 1975 in support of his contention that a provision had to be made by way of explanation, in respect to entry 73.32, whereby the intention to include bolts and nuts used in the motor parts, also under that general heading, was made explicit and the very fact that this explanation was found necessary in the Customs Tariff, as revealed by Explanatory Notes to Chapter XV, makes it unmistakably clear that they would not be so treated but for this provision having been made in the relevant tariff itself. 16. He also placed reliance on Explanatory Notes to CCCN, Chapters 73 and 87 in support of his assertion that these hub-bolts and nuts could not be treated, as general items, but were essentially parts of the automobiles and urged that where the tariff does not define any expression used therein, reference to the CCCN, by way of guidelines was expedient, and in support of this contention, he re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel by urging that all that the Tribunal held in the case of Mukund Engineering Works was that unless there was any change in material facts or relevant tariff entry had undergone some modification, the previous classification could not be changed. He argued that this authority based on the judgment of the High Court of Delhi in J.K. Synthetics case (1981 E.L.T. 328) would not apply to the facts of present case where there has been admittedly a change in the tariff entry itself, and departmental action for reclassification ensued upon such a change. In addition to the cited case being distinguishable, he argued that it was otherwise an established proposition that the principle or doctrine of estoppel did not apply in taxation matters, and given sufficient reasons and after observing principles of natural justice, such as issue of show cause notice, etc., the classification could certainly be changed. He thus strongly defended the view taken by the lower authorities, which they did after affording all opportunities to the appellants to show cause against the proposed reclassification. According to him, when the Central Excise Tariff was self-contained, reference to parallel tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id by him on the fact that these goods are only meant to be fitted on hubs which are part of automobiles and which lend motion to the wheels and also of the fact that the appellant is a manufacturer of automobile parts and these hub-bolts and nuts are also being made especially for motor vehicles. 21. We have carefully examined all these aspects of the matter but we feel that the plea of the appellant that no change can be considered to have taken place after amendment of T.I. 34A, does not impress because it is apparent that an entry which was previously NOS has been now made very specific, and relatable only to specified parts of motor vehicles. We find justification in the contention put forward by the learned SDR, namely that the contest now is between T.I. 52 which specifically covered bolts and nuts of every description as against the residuary or general entry represented by Item 68. We further find that though the function of these goods as fasteners is patently manifest, the supposed engineering features, whatever they may be, are latent, and neither the catalogue of the appellants contains any indication as to what those could be nor any other literature has been shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants have placed emphatic reliance, it is not indicated in detail as to on what technical data, it could have been based, or which the appellants might have produced before the said authority. In the absence of any material to indicate as to in what context the said opinion might have been recorded, we do not find it possible to go by the same, on its face value. 25. The Budget Instructions as well as the note of the Chairman of the Board and even the Notification No. 96/79, all proceed on the assumption that the goods have to be parts of the motor vehicles, and in the case of bolts and nuts, the ones which perform a function other than that of fasteners, they could be treated as parts of the motor vehicles. It is to be noted that the burden of establishing this basic requirement was on the appellants; namely, that these particular goods were capable of performing functions, other than that of fasteners and that burden has not been discharged in this case, as already indicated. We do not think that the appellants could take advantage of any of the above said material. The trade notices of different Collectorates which were of early dates, and some even prior to the amendme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not make them as `parts of that machine. For instance, even an ordinary nut will have to be of a given shape and size as well as specifications, depending upon whether it is to be fitted in a refrigerator or television set, but that would not convert them into refrigerator or T.V. Parts . 28. We also find that the authority of the Bombay High Court reported in 1982 E.L.T. 237 (Bom.) in the case of Swadeshi Mills Company Ltd. v. Union of India Others, dealing with the case of wind screen for motor vehicles was based entirely on different proposition because in that case, the entry under consideration was 23A(4) which deals generally with `glass and glassware . It was in this context that it was held that there was distinction between the raw material which was the glass in this case and the end-product which was apparently wind screen, meant for motor vehicles. We are not faced with such type of wide sweeping general entry in the present case but a very specific entry dealing with specified goods of the description covering the present goods and in face of this situation, the ratio of that decision can be of no avail to the appellants. 29. We, therefore, are of the con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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