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2016 (11) TMI 996 - CESTAT MUMBAI

2016 (11) TMI 996 - CESTAT MUMBAI - TMI - Classification of goods - laminated safety glasses - classified under the head 84.27 or 84.28 as claimed by the appellant, or under heading 73.08/73.26 of CETA? - the decision of Gajra Gears Ltd., Vs. CCE [2015 (5) TMI 629 - SUPREME COURT] referred where it was held that Fork-lift truck is operational without pallets and as such pallets are not parts of the same. If the contention of the Respondent is accepted, motor sprit will be part of a motor car as .....

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ppellant itself, that these pallets which are manufactured/assembled in the factory of the appellant are in the nature of material handling equipment, to keep and carry work in progress goods from one machine to the other. Thus, the use of the pallets is for carrying out the material from one machine to the other. It cannot, therefore, be said that these goods are used in relation to the manufacture in or in relation to the manufacture of the final products. We are, therefore, of the opinion tha .....

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laminated safety glasses falling under heading 7004.20. Pallets and trolleys are used in the various stages of manufacture of final products basically as material handling equipment for movement of semi-finished and finished products from one place to another in the factory efficiently and to avoid breakage. The appellants get the pallets and trolleys fabricated on labour charge basis from M/s.Yash Engineers in their factory by supplying the raw materials. A show-cause notice was issued to the .....

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y the appellant, but they are classifiable under heading 73.08/73.26 of CETA. Relying on the decision of Maruti Udyog Ltd., Vs. CCE - 1998 (01) ELT 675, the Commissioner (Appeals) observed that the goods cannot be treated as capital goods. Aggrieved by the said order, the appellants are in appeal before this Tribunal. 2. The learned Counsel for the appellant argued that the Larger Bench of this Tribunal in the case of Banco Products (India) Ltd. Vs. CCE, Vododara - 2009 (235) ELT 636 (Tri-LB) ha .....

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product. Reference in this regard, is made to Tribunal s decision in the case of CCE Bangalore v. M/s. Anglo French Drugs & Indus. Ltd. - 2008 (225) E.L.T. 76 (Tri.-Bang.), in the case of CCE Rajkot v. M/s. Ajanta Transistor Clock Mfg. Co. - 2009 (233) E.L.T. 97 (Tri.-Ahmd.). In the later decision, Tribunal took note of the Hon ble Supreme Court s decision in the case of M/s. Tata Engineering and Locomotive Co. Ltd. [2003 (158) E.L.T. 130 (S.C.)] holding that the bins, trolleys, etc. are ent .....

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capital goods as is existed in the year 1995-96 and is not applicable to the definition of capital goods as it existed in the year 1999-2000. He further argued that the table annexed to Rule 57Q of the CER, 1944 covers all components/spares and accessories of the goods specified against Sl.No.1 to 4 of the said table. It was argued by the learned Counsel that even if the said goods are held classifiable under Chapter 73 of the CETA, the same being the accessories of the material under the equipm .....

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in this appeal was before the Hon ble Supreme Court in the case of Gajra Gears Ltd. (supra). The Hon ble Supreme Court in the case of Gajra Gears Ltd. was examining the classification of pallets manufactured and used within the factory for movement of material during the process of manufacture. The Hon ble Supreme Court in the said decision has observed as follows: 2. The process of manufacturing of motor vehicles parts involves various operations. The appellant, for this purpose, also makes use .....

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ated 16-3-1995, as amended and prevalent on the date when the dispute arose, namely, in the year 1999. 4. The appellant had filed its declaration claiming classification under Chapter Heading 84.31 and had also claimed benefit of the aforesaid Notification. This was denied by the adjudicating authority and the view of the adjudicating authority has been affirmed by the CESTAT in its impugned judgment dated 1-12-2004. As per the Department the goods in question are to be classified under Chapter .....

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not in dispute that the impugned pallets are made of iron or steel. It is the contention of the respondents that these pallets are in the nature of material handling equipment and are specifically designed to put up in process goods for shifting or transfer and as the pallets are suitable for use solely or principally with the machinery of Heading No. 84.27 (fork-lift trucks) these are to be classified under Heading 84.31. For being classified under Heading 84.31, the goods should be first a pa .....

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n has found that inserts were not parts of the excavator as the excavator was operational even without these inserts and they were meant only to improve the life of the teeth provided with the scoopers . In the present matter also the fork-lift truck is operational without pallets and as such pallets are not parts of the same. If the contention of the Respondent is accepted, motor sprit will be part of a motor car as the same cannot be used without it. Once it is held that pallets are not parts .....

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sifiable under Heading 84.31 of the Tariff. 6. Insofar as the second question is concerned, namely, whether benefit of exemption under Notification No. 67/95 issued under the Central Excise Act, 1944 is available in respect of these pallets or not, we find that the Tribunal has held that the Notification exempts capital goods, as defined in Rule 57Q of the Central Excise Rules, 1944, manufactured in a factory of production and at the material time as per the definition of capital goods given in .....

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umn (2) of the Table hereto annexed (hereinafter referred to as inputs ) manufactured in a factory and used within the factory of production in or in relation to the manufacture of that products specified in column (3) of the said Table; from the whole of the duty of excise leviable thereon which is specified in the Schedule to the Central excise Tariff Act, 1985 (5 of 1986): Provided that nothing contained in this notification, shall apply to inputs used in or in relation to the manufacture of .....

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stry of Finance (Department of Revenue) No. 108/95-Central Excise, dated the 28th August, 1995, which are exempt from the whole of duty of excise leviable thereon or are chargeable to Nil rate of duty. Explanation. - For the purposes of this notification inputs does not include - (1) packaging materials in respect of which any exemption to the extent of the duty of excise payable on the value of the packaging materials is being availed of for packaging any final products; (ii) packaging material .....

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of the Schedule to the said Act; (iii) goods classifiable under Sub-heading Nos 2710.11, 2710.12, 2710.13 or 2710.19 (except Natural gasoline liquid) of the Schedule to the said Act; (iv) high speed diesel oil classifiable under Heading No. 27.10 of the Schedule to the said Act. All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following, namely, - (i) goods classifiable under any heading of Chapter 24 of the Schedule to the said Act; (ii) .....

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anufactured in a factory and used within the factory of production are exempted. We perused the definition of capital goods appearing in Rule 57Q which was in operation at the material time and find that the goods in question are not covered by the said definition. However, as per para (ii) those goods which are specified in Column (ii) of the Table which is appended to the said Notification and manufactured in a factory and used within the factory of production in or in relation to manufacture .....

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