TMI Blog1984 (11) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Advocate for the appellants, that since there were in effect four orders of the Board, there should have been four (and not three) appeals to the Tribunal. Shri Jhunjhunwala undertook to file one more appeal, but requested that in the meantime the hearing might be proceeded with. We, accordingly, proceeded on the understanding that the present hearing would not cover the appellants case relating to duty of ₹ 13,271.82 paid during the period 6-11-1975 to 8-11-1975, which would be covered by the further appeal to be filed. 3. Shri Jhunjhunwala raised a preliminary point that the order of the Board in this case was without jurisdiction. He pointed out that the show cause notice initiating the proceedings was issued on 1-11-1976, whereas the Board s order was passed on 16-4-1984. In the meantime, that is with effect from 11-10-1982, Section 35A, Central Excises and Salt Act, under which the show cause notice had been issued, was superseded and the Board thereafter had no powers of revision. Therefore on 16-4-1984 when the Board s order was passed the Board had no power to pass such an order and it was, accordingly, without jurisdiction, since the proceedings must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F ). 13. It is submitted that hub-bolt/wheel-mounting pin is a fixed part of the hub attached to the brake drum. The bolt or pin in question is pressed into position in the hub and it remains fixed there, so that it cannot be screwed out or removed from its position. Only the nut is tightened to the bolt/in after the wheel is mounted in position. This nut is also manufactured as per the specification to suit the threading of the bolt. It can be seen that in the rear axle assembly, the driving power is actually conveyed to the Wheels through the hub as a result of the position of the wheel mounting pin or hub-bolt. 14. As discussed above, this item is not capable of being used as general type of fastener but have a specific functional utility. We, therefore, feel that this item does not fall under Tariff Item 52. The entire production of this item is supplied to the Original Equipment manufacturers as automobile parts and for replacement purpose. They are also not capable of being used in any other vehicle. In short, the production of this item is strictly as per the specifications and the drawings supplied by the Original Equipment manufacturers. Thus, the part numbers and sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an 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 N.O.S. has been now made very specific, and relatable only to specified part of motor vehicles. We find justification in the contention put forward by the learned S.D.R., 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. (emphasis supplied by Shri Jhunjhunwala). Again in para 22 the following observations have been made :- We are, therefore, of our firm view that after amendment in 1979, the position has changed materially and there was no bar in the way of departmental authorities to undertake reclassification, in face of the specific Tariff Item, covering bolts and nuts of every type and shape, namely, Entry 52, and examine the assessee s claim for taking them under the residuary Item 68. The case thus falls within the situation as recognised by the decision of the Tribunal in Mukund Engineering case, as well as the basic authority of Delhi High Court in the J.K. Synthetics case, referred to above. And fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty in terms of Notification No. 99/71. He submitted that it would be discriminatory if the appellants who were in the same line of business and were competitors of M/s. Gurmukh Singh and Sons, were subjected to duty. 13. Finally, Shri Jhunjhunwala submitted that since both the appellants and the Department were proceeding under a common mistake of law, no questions of limitation should he allowed to stand in the way of the appellants being given relief. (This had reference to a possible objection that the refund claims filed by the appellants and admitted by the Assistant Collector related to some payments of duty made beyond the period of limitation laid down in the Central Excise Rules). 14. Replying on behalf of the Department, Shri Tayal submitted that in terms of sub-section (3) of Section 35P, Central Excises and Salt Act, it was very clear that the proceedings initiated by the Board under Section 35A ibid prior to amendment were to be continued as if that section had not been substituted. Accordingly, the Board was fully clothed with jurisdiction to continue the proceedings and pass the order under appeal. 15. Shri Tayal submitted that he too was relying on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and bolts (though none was described as a hub-bolt). In that case the Bench, after having considered the nature of all the 27 articles, and having perused the catalogue of the appellants relating to these articles, had observed that all of them were described in the catalogue as fasteners and had held that all of them would fall under Item 52. Although that matter pertained to the post-1979 period, the conclusions reached therein pertaining to the factual position were equally applicable to the present case. 19. With reference to the argument of the appellants that the articles had the function of transmitting power, Shri Tayal pointed out that the appellants had sought to give them the alternative name of wheel mounting pins . If this description was to be accepted, it would be seen that they were only used for mounting the wheel and there was no question of transmitting power. Shri Tayal submitted that the transmission of power, as ordinarily understood, would be through such mechanisms as axles and connecting rods and not bolts and nuts which are used only for holding articles firmly together. 20. Shri Tayal also referred to the Tribunal s decision in the case of Colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pertained to the period subsequent to 1-3-1975 (but prior to 10-5-1979) and the question there was whether classification should be under Item 52 or Item 68 In para 4 of that judgment reference was made to the argument of the petitioners (in that case) that their product was three to four times the price of an ordinary nut, was manufactured from special material and had special specifications and designs, was used by a separate class of consumers, and was inter alia used for locking and providing seal to any liquid entering a particular area, etc., and was not merely used for fastening as a nut is used. Evidence was produced to show that the nuts were special fasteners used as original equipment on critical applications in the automobile industry. It was also stressed that these nuts were ordinarily stocked in the auto spare parts market and were not sold in the hardware market where nuts were sold. The argument was also advanced in that case that there was hostile discrimination between the petitioners and two other concerns, namely M/s. Pioneer and M/s. Gurmukh Singh. 22. Shri Tayal pointed out that all these arguments had been rejected by the Hon ble High Court, which had hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is quite clear to us that nyloc nut is nothing but a self-locking nut ...... It is the commodity as a whole which will have to be taken into consideration, while deciding the question as to whether it falls within a particular entry, and no undue stress can be laid on any isolated function or quality. 23. The High Court had also rejected the argument that the goods were not available in the ordinary hardware market, in the following terms : On a comprehensive consideration of the material before us, there is no escape from the conclusion that nyloc nut is a nut, though it could be described as an improvised or special type of nut. It will make no difference whether it is readily available in the ordinary hardware market or is available only in automobile shops, or is costlier than an ordinary iron nut. It is quite clear that if this nut could not be used basically as a fastener, then all other additional advantages will have no meaning. 24. The High Court also rejected the argument of hostile discrimination vis-a-vis M/s. Pioneer or Gurmukh Singh. It was observed that those cases were decided on their own facts and no general rule of law was laid down in that behalf, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unwala sought to place reliance, refers not only to transfer of certain pending proceedings but also to transitional provisions, of which sub-section (3) is one. The position being amply clear from the statute, there is no need to rely on any other provisions or decisions and we hold that the continuance of the proceedings by the Board after 11-10-1982 was with jurisdiction, 31. As regards the distinction between pre-amendment and post-amendment cases, it is true that there was a material amendment to Item 34A with effect from 10-5-1979. It is also true, that the decision in the case of Sri Ramdas Transport Ltd. related to the period subsequent to the amendment. The learned advocate for the appellants is right in his contention that the position prior to the amendment must be considered on its own merits and that the adverse decision in the Ramdas case would not ipso facto apply to their case. 32. Shri Jhunjhunwala had gone further and argued that certain observations in the Ramdas case were actually favourable to the appellants in regard to the pre-amendment period. One could perhaps read some of these observations as implying that a different classification was possible pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o and accepted, but it was nevertheless held without hesitation that the nuts were covered by Item 52. Item 52 is a residuary item, and so was Item 34A at the relevant time (vide para 6 above). It is a basic principle of classification that where two items are possible, the specific item will prevail over the residuary item, whether it is one of the restricted ones like Item 34A or the general residuary Item 68. If, anything, the case of M/s. Simmonds Marshal was somewhat stronger than the case of the present appellants, because the nuts, they manufactured had nyloc collars, whereas no such feature has been claimed for the goods before us. Nevertheless, the goods before the High Court were held as classifiable under Item 52. Accordingly, we respectfully follow the decision of the Bombay High Court, only adding a few supplementary observations as below. 35. Reference has been made to the alternative name of the goods under consideration as Wheel mounting pins . This makes no material difference, since apart from the characteristics of the goods themselves, it is admitted that they are known as Hub-bolts . It is a matter of interest that the name of the appellants themselves is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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