TMI Blog2008 (3) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... t 'the Act') against the judgment and final order dated 9 th April, 2002 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (for short 'the Tribunal') in Final Order No.140/2002-B in Appeal No.E/2199/2001/B wherein and whereby The Tribunal relying upon a judgment of the High Court of Karnataka in the case of Supreme Motors v. State of Karnataka has allowed the appeal filed by the assessee-respondent. Facts: Assessee-respondent (hereinafter referred to as 'the assessee') was holding Central Excise Registration No.19 MOR-13 MOD-III 92 and engaged in the manufacture of Rail Assembly front Seat (Omni), Adjuster Assembly slider seat, YF-2, Rear Back Lock Assembly and 1000 CC Rear Back Lock Assembly. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of 15%. Terming that the assessee had been mis-classifying its products, two show cause notices dated 4.2.1999 and 5.7.1999 were issued to it calling upon it to show cause as to why products manufactured by it as parts and accessories of motor vehicles and classified under chapter heading 8708.00 be not treated as parts of the seats which are classifiable under chapter heading 9401.00 attracting higher rate of duty at the rate of 18% and as to why the differential duty amounting to Rs.9,50,995/- be not demanded and recovered under Rule 9(2) of the Central Excise Rules, 1944 (for short 'the Rules') read with Section 11A of the Act.The adjudicating authority vide its order dated 24.11.1999held that the goods manufactured by the assessee we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer reported in 1991 (51) ELT 173(SC) held that the products manufactured by the assessee merited classification under chapter heading 8708.00 as "parts and accessories of motor vehicles".Hence revenue is before us. Learned senior counsel appearing for the revenue contends that the products manufactured by the assessee are parts of the seats because assessee was supplying these products to M/s Bharat Seats Limited and M/s Krishna Maruti Limited which were manufacturing seats classifiable under chapter heading 9401.00.Per contra, counsel appearing for the assessee contends that the products manufactured by the assessee are not seats or parts of the seats as contemplated under chapter heading 9401.00. The seat is complete without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s put forth by the department and classifiable under chapter heading 9401.00 or the same are parts and accessories of motor vehicles, as claimed by the assessee and classifiable under chapter heading 8708.00." Before coming to a conclusion, it would be appropriate to look at the two rival entries falling under chapter Headings 8708 and 9401 of the Act. The same are reproduced below for convenience of discussion: Heading No. Sub-heading No. Description of Rate of goods duty 87.08 8708.00 Parts and accessories 15% of the motor vehicles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial through M/s Bharat Seats Limited and M/s Krishna Maruti Limited which are manufacturing seats classifiable under chapter heading 9401.00 does not lead to the conclusion that the products in question fall under chapter heading 9401.00. In Mehra Brothers(supra), this court observed in para 6 as follows: 6. In Supreme Motors v. State of Karnataka case(supra), the Karnataka High Court has taken different view. It held that the car seat covers, at best could make the seat more comfortable, but do not serve as aids to the vehicle as a whole, and therefore, they must fall outside the ambit of Entry 73 of the Second Schedule to the Karnataka Sales Tax Act, 1957 and was not exigible to sales tax at 13 per cent. Undoubtedly th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8708 covers both the 'parts' as well as 'accessories'. The items manufactured by the assessee are only adjuncts. These are to be affixed on the floor of motor vehicles. When seats are affixed on these rails, seats can slide back and forth with the operation of a lever forming part of other rail assembly front seat adjuster. This enables the driver or the passenger, to adjust the position of the seat to suit his comfort and convenience. These are merely to improve the efficiency and convenience of the seat and does not form part of the seat. The sears are complete in themselves without these mechanisms and therefore it cannot be held that the parts manufactured by the assessee merit classification under chapter 9401. Rather the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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