TMI Blog2022 (9) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 and Notification No 49/2008-CE (NT). The Revenue has alleged that all the Rollers and Ball bearings imported by the Appellant are either parts or components of vehicles falling under Chapter 87 (excluding vehicles falling under Heading 8712,8713, 8715 and 8716) or parts, components of goods falling under tariff item 84264100, Headings 8427, 8429 and sub-heading 843010 - the bearings falling under Chapter heading 8482 cannot be called Parts and Parts and Accessories even if they constitute integral part of engine or motors of machines or apparatus of heading 8401 to 8479. Articles of heading 8481 or 8482 are excluded from the definition of Parts and Parts and Accessories under Section Note 2 (e) of Section XVII. As far as heading 8483 are concerned the same could be classified as Parts and Parts and Accessories provided they constitute the integral part of engine and motors. In view of above it cannot be held that the goods ordinarily falling under heading 8482 can fall under any classification under Section XVII of the Central Excise Tariff Act, 1985. It is apparent that the goods roller and ball bearings would be classified under heading 8482 as ball and roller ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , but also any person who engages in their production or manufacture on his own account. 1.3 The Serial No. 100 and 100A of the said Third Schedule of the Central Excise Act, 1944 reads as follows:- Sr.No Chapter, heading, Subheading or tariff item Description of goods Abatement as a percentage off retail sale price 100 Any Chapter Parts, components and assemblies of vehicles (including chassis fitted with engines) falling under Chapter 87 excluding vehicles falling under Heading 8712,8713, 8715 and 8716 30 Sr.No Chapter, heading, Subheading or tariff item Description of goods Abatement as a percentage off retail sale price 100A Any Chapter Parts, components and assemblies of goods falling under Tariff Item 84264100, Headings 8427, 8429 and subheading 843010 30 Serial No. 100 was introduced with effect from 27.02.2 010 and Serial No 100A was introduced with effect from 29.04.2010 2. Learned Counsel for the appellants argued that sine qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the imported bearing have their end use also in automotive sector and in the absence of any specific marking as to ascertain their usage clearly sustains the belief that bearings are mostly used in automotive or parts of automobiles. This assumption is contrary to the ratio of cited judgments of this Hon ble Tribunal. 2.3 Learned Counsel for the appellant argued that the Learned Commissioner held that the Bearings are parts of automobiles relying upon clarification dated 16.12.2018. He argued that no findings are recorded that the imported goods bearings are parts of the goods described in sr.no.100A of the Third Schedule. The sole basis of covering Bearings under both sr. no. 100 and 100A is only the alleged dual usage of the Bearing. Even going by the case of the department that Bearings are covered by both sr. no. 100 and 100A itself is indicative of the fact that Bearings are not parts of vehicles of Chapter 87 and goods Chapter 84 referred to respectively in 100 and 100 A. 2.4 He argued that the imported goods are described in the bill of entry, commercial invoices issued by the overseas suppliers and by the appellant and its dealers as Bearings . He argued that Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued that without prejudice and in any event, in the event the imported Bearings are held to be covered under notification issued under section 4A of the Act then in that event demand can only be for alleged short levy of CVD under section 28 of the Customs Act and not under Section 11 A of the Act. 2.8 Learned Counsel for the appellant argued that the DGCEI during the investigation recorded statements and collected data in form of letters of the various dealers of the Appellants. These statements and letters clearly show that Bearings are not for use in the automotive sector except a stray case of use of bearings of 2 codes in two wheelers. Learned Counsel for the appellant argued that the DGCEI, in the course of purported investigation, recorded statements of many persons. Search conducted at the premises of Premier (India) Bearings P, Ltd., Ahmedabad. The customers are mainly Rolling Mills, Machinery manufacturers, and Textiles manufacturer. Similar search was conducted at Navi Mumbai of Premier Bearing. Names are Jindal Saw, CEAT, Maharashtra Seamless, Reliance Industries, JSW Steel etc. He argued that these investigation clearly show that bearings are sold by the dealers o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. in his statement dated 12th October, 2015 was specifically asked whether bearing has dual application viz. industrial and automobile usage and he answered that bearings have only industrial usage. He further stated that he had given details of Industrial Customers in pen-drive on the same day vide his letter dated 10.10.2015. vii. Mr. Vimal Kumar Gupta - Authorized Person of M/s. Industrial Engineering Services in his statement dated 19.10.2015 was specifically asked whether the bearing has dual application viz. industrial and automobile usage and he answered that bearings are sold to industrial dealers and have only industrial usage. viii. Mr. Kishore Amrutlal Shah- Director of M/s. Laxmi Bearing (Gujarat) Pvt. Ltd. in his statement dated 20th October, 2015 was specifically asked whether the bearing has dual application viz. industrial and automobile usage and he answered that bearings are sold to industrial distributors and have only industrial usage. ix. Mr. Alkesh Manubhai Mashruwala Proprietor of M/s. Arihant Tarding Co. dated 20th October 2015 was specifically asked whether the bearing has dual application viz. Industrial and automobiles usage and he answered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Premier Bearing. However, he agreed that he had used bearing having code no, 6204 and 6202 was used in two wheelers. 2.11 Learned Counsel for the Appellant argued that except in one case, bearings of two codes sold by Premier India Bearing to M/s. Mohra Trading Company, which in turn sold two of the bearings to Sanmati Automobiles Private Limited, which are claimed to have been used in two wheelers. 2.12 Learned Counsel for the Appellant argued that evidence in form of the dealers and others clearly shows that bearings are only for industrial use only. The single incident of use of bearing in two wheelers cannot establish that the bearings are parts of vehicles of Chapter 87. He argued that imported bearings are not sold by the Appellant directly to any automobile dealers or service station. The Bearings are sold to Industrial dealers, who have sold them to Industrial customers only. The dealers of the Appellant had provided details of the Buyers and none of them are either automobile manufacturer or service station. 2.13 Learned Counsel for the Appellant argued that the Commissioner has rejected the contention of the Appellant that said bearings are only for industrial u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on which packing slip is affixed. The imported sleeves/bearing in bulk are packed in individual package and after affixing MRP are then repacked in the bigger corrugated boxes. He argued that the MRP is affixed in single packing and bulk packing bearings to comply with provisions of Legal Metrology Act and otherwise not covered by section 2(f)(iii) of the Act. 2.16 Learned Counsel for the Appellant argued that invocation of extended period of limitation is in the facts of the case untenable. The Appellant was registered as dealers. The Appellant s understanding that imported bearings are not covered by sr.no. 100 and 100A of the Third Schedule and therefore not covered by section 2(f) (iii) of the Act and not subjected to duty under section 4A of the Act. The overwhelming evidence gathered by the DGCEI also show that the imported bearings are not having dual usage. The ingredients of section 11A(4) are not applicable and demand for extended period is otherwise not tenable. 2.17 Learned Counsel for the Appellant as an alternative argued that the appellant is entitled to credit of CVD paid on the Bearings at the time of import. It is now well settled that when the activity is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rketable to the consumer amounts to manufacture. The goods on which the clause (iii) of sub- section 2(f) of the Central Excise Act, 1944 applies are listed in the Third Schedule of the Central Excise Act, 1944. 4.2 The Serial No. 100 and 100A of the said Third Schedule of the Central Excise Act, 1944 reads as follows:- Sr.No Chapter, heading, Subheading or tariff item Description of goods Abatement as a percentage off retail sale price 100 Any Chapter Parts, components and assemblies of vehicles (including chassis fitted with engines) falling under Chapter 87 excluding vehicles falling under Heading 8712,8713, 8715 and 8716 30 Sr.No Chapter, heading, Subheading or tariff item Description of goods Abatement as a percentage off retail sale price 100A Any Chapter Parts, components and assemblies of goods falling under Tariff Item 84264100, Headings 8427, 8429 and subheading 843010 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter, heading, Subheading or tariff item Description of goods Abatement as a percentage off retail sale price 109 Any Chapter Parts, components and assemblies of goods falling under tariff item 84264100, headings 8427,8429 and subheading 8430 10 30 4.6 The appellants are manufacturers of bearings. The appellants also import bearing and sell the same after re-packing. The issue in dispute is if these bearings imported and repacked by appellant are covered by Sr. No. 100 and 100A of the Third Schedule of the Central Excise Act, 1944 and the Activity of packing or re-packing of such goods in a unit container or labeling or re- labeling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer amounts to manufacture. If it is held that the product manufactured by the appellant is covered by Sr.No. 100 or 100 A of the Third Schedule then the same would be liable to assessment under section 4 A in terms of Sr. no. 108 and 109 of Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Any Chapter Parts, components and assemblies of goods falling under tariff item 84264100, headings 8427,8429 and subheading 8430 10 30 It is noted that the entry 100 of the Third Schedule corresponds to 108 and Notification No 49/2008-CE (NT). Entry 100A of the Third Schedule corresponds to the entry 109 and Notification No 49/2008-CE (NT) . 4.9 The Revenue has alleged that all the Rollers and Ball bearings imported by the Appellant are either parts or components of vehicles falling under Chapter 87 (excluding vehicles falling under Heading 8712,8713, 8715 and 8716) or parts, components of goods falling under tariff item 84264100, Headings 8427, 8429 and sub-heading 843010. The appellant have relied on Note 2 and Note 3 of Section XVII which covers vehicles, aircraft , Vessels and associated transport equipment which defines the terms Parts and Parts and Accessories . The note 2 and Note 3 reads as follows:- 2. The expression parts and parts and accessories do not apply to the following articles , whether or not they are indentifiable as for the goods of this Section: (a) --------------- (b) ---------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al appliances, electrical equipments, parts thereof, sound recorders and reproducers, television image and sound recorders and reproducers and parts and accessories of such articles. Section Note 2 of Section XVI reads as under:- 2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules : (a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings; (b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517; (c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord any evidence to prove that as appellant assessee has sold any of his consignments of ball bearings to any manufacturer of automobile or any service station of automobiles. 12. In view of our observations, we find that the department has stretched the provisions of law unnecessarily to include small quantities of ball bearings cleared on retail sale under the provisions of Section 4A without substantiating such claim with some concrete evidences. In view of the above, we find that ball bearings are not included under relevant notifications issued under Section 4A of the Central Excise Act, 1944 and therefore, same cannot be considered for assessment on the basis of MRP value. While holding the above view, we also take shelter of following case laws which are cited by the Learned Advocate, State of Tamil Nadu v. Vinyl Cable Industries (supra) where Hon‟ble High Court has observed as under :- 6. It is well settled that a particular use to which a single article is put alone is not conclusive to know the real nature or character of the article that will determine how to identify it for the tax purpose. As noticed by the Tribunal, the Revenue authorities identifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lance or in commercial world or in trade circle or in its popular sense meaning . Similar views have been expressed by the Apex Court in CCE, New Delhi v. Connaught Plaza Restaurant (P) Ltd. reported in 2012 (286) E.L.T. 321 (S.C.) and Commissioner of Trade Tax, U.P. v. Kartos International reported in 2011 (268) E.L.T. 289 (S.C.) dealing with a sales tax matter the Hon‟ble Supreme Court in United Copies (India) Pvt. Ltd. v. Commissioner of Sales Tax reported in 1997 (94) E.L.T. 28 (S.C.) held that rubber flaps cannot be classified as accessories of motor vehicles. The Court also refer to Central Excise Tariff Act and mentioned that flaps are taxable under Tariff Heading 4012. 4.It is also brought to our notice that in the case of appellant‟s unit in Mysore, similar dispute arose. The Commissioner (Appeals) vide his order No. 228/2010, dated 22-10-2010, following the earlier appellate order dated 14- 5-2010, which was accepted by the Department, held that tyres, tubes and flaps manufactured by the appellant‟s unit at Mysore is not to be assessed under Section 4A as parts of automobile. It is to be noted here that tyres and tubes are not only used for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
