TMI Blog2007 (4) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... ppropriate classification is under headings 87.08 and 87.14. Appeal allowed. - Civil Appeal No.5345 of 2001 & Appeal No. E/3322/2000-B - Final Order No. 239/2001-B, - Dated:- 26-4-2007 - Ashok Bhan and Dalveer Bhandari, JJ. K. Radhakrishnan, Senior Advocate (Mrs. B. Sunita Rao, Shanti Bhushan Chaubey and B. Krishna Prasad, Advocates with him) for the respondent. B.L. Narasimhan, Alok Yadav and M.P. Devanath, Advocates, for the appellant. [Judgment per : Ashok Bhan, J.]. - The assessee-appellant (hereinafter referred to as "the appellant"), being aggrieved by the Final Order No. 239/2001-B dated 17-04-2001 passed by the Custom, Excise Gold (Control) Appellate Tri-bunal (hereinafter referred to as "the Tribunal") in Appeal No. E/3322/2000-B, has filed the present appeal under Section 35L(b) of the Central Excise Act, 1944 (hereinafter referred to as "the Act"). The Tribunal by the impugned order has rejected the appeal filed by the appellant seeking the classification of "plastic name plates" under Chapter 87 as 'parts and accessories' of motor vehicles and instead classified it as 'other plastic products' under Chapter 39. FACTS 2.The appellant is a small-sca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of plastics? 7.Before adverting to the submissions made by the opposing Counsels for the parties in respect of the above question, it is worthwhile to mention the competing headings relevant to the present discussion. COMPETING HEADINGS: 8.The relevant portions of heading 87.08 and 87.14 are reproduced below for reference: " 87.08 Parts and accessories of the motor vehicles of heading Nos. 87.01 to 87.05 87.14 Parts and accessories of vehicles of heading Nos. 87.11 to 87.13" 9.The relevant portions of heading 39.26 are reproduced below for reference : 39.26 Other articles of plastics ISSUES FOR DETERMINATION 10.Having laid out the facts and the relevant headings in the present matter, we can now proceed to the legal issues that we are required to decide upon. Based on the arguments of the Counsels for the parties, the following issues arise for determination : (a) Whether 'plastic name plates' are classifiable under headings 87.08 and 87.14 by falling within the scope of term 'parts and accessories' of motor vehicles; (b) Alternatively, even if they do fall within the scope of 'parts and accessories' of motor vehicles, whether there is any provision in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circulars of the Department [Chandigarh Collectorate Trade Notice No. 94-C.E./90 dated 30-0-1990 and Calcutta II Collectorate Trade Notice No. 10/87 dated 19-2-1987] where 'plastic boxes' and 'helmet-locking devices', items which are according to him less necessary, are directed to be considered 'parts and accessories' of motor vehicles. Finally, he submits that the headings under Chapter 87 should gain primacy as they are more specific while the heading under Chapter 39 is residuary and more general in nature. Thus, Counsel for the appellant has challenged the decision of the Tribunal. 15.In the light of the rival submissions made by the counsel for the parties before us, we are required to determine whether the Tribunal has correctly held that 'plastic name plates' do not fall within the purview of headings 87.08 and 87.14. As far as these two headings are concerned, it is possible to include two kinds of goods therein - those which are either 'parts' of motor vehicles or those which are 'accessories' of motor vehicles. While a case can be made for the inclusion of name plates in Chapter 87 as 'parts' as well as 'accessories' of motor vehicles, we are not examining the former ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se in projectors or other cinematographic equipment. We think that the Andhra Pradesh High Court correctly held that the main use of the arc carbons Under consideration was duly proved to be that of production of powerful light used in projectors in cinemas. The fact that they can also be used for search lights, signalling, stage lighting, or where powerful lighting for photography or other purposes may be required, could not detract from the classification to which the carbon arcs belong. That is determined by their ordinary or commonly known purpose or user. This, as already observed by us, is evident from the fact that they are known as cinema arc carbons" in the market. This finding was enough, in our opinion, to justify the view taken by the Andhra Pradesh High Court that the goods under consideration are covered by the relevant entry No. 4. (Para 11) [Emphasis supplied] 18.The above decision was relied upon in the case of Mehra Bros. v. The Joint Commercial Officer, Madras [(1991) 1 SCC 514]. The primary issue before the Court in this case was whether 'car seat covers' could be considered 'articles adapted to use generally as parts and accessories of motor vehicles'. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been reiterated in the cases of Union Carbide India Ltd. v. State of A.P. [1995 Supp. (2) SCC 267] and Commissioner of Central Excise, Delhi v. Allied Air-conditioners Corp.(Regd.) [(2006) 7 SCC 735]. 20.The Court was also faced with similar circumstances in the case of Jay Engineering (supra). In this case, the Respondent was the manufacturer of electric fans, and brought into its factory name places under tariff item 68 of the erstwhile Central Excise Tariff. The name plates were affixed to the fans before marketing them. Here, the Court emphasized on the necessity of name plates for the marketing of the product. The Court observed : "In those circumstances, in our opinion, the Tribunal was right in arriving at the conclusion that the nameplate was not a piece of decoration. Without the nameplate, the electric fans as such, could not be marketed; and that the dealer was entitled to the benefit of the notification No. 201/79-C.E. for the purpose of obtaining proforma credit. Fans with name plates, have certain value which the fans without the name plates, did not have. If that be so, then the value added for the accretion of nameplate was entitled to pro- forma credit in ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se to the parties it would be appropriate for us to decide the point ourselves. 24.In this regard, it has been submitted by Counsel for the Revenue that the Explanatory Notes in the Harmonized Commodity Description and Coding System [hereinafter referred to as "HSN"] to Section XVII (which includes Chapter 87) make it clear that plastic name plates are excluded from the scope of Chapter 87 and are therefore required to be classified under the residuary provision in Chapter 39. 25.Since the submission of the Revenue is based purely on the HSN Explanatory Notes, it is essential to reproduce the relevant parts of the HSN Explanatory Notes. The notes below relevant headings, heading 87.08 and 87.14, state as follows : "This heading covers parts and accessories of the motor vehicles of headings 87.01 to 87.05, provided the parts and accessories fulfil both the following conditions : (i) They must be identifiable as being suitable for use solely or principally with the above-mentioned vehicles; and (ii) They must not be excluded by the provisions of the Notes to Section XVII (see the corresponding General Explanatory Note)." [Emphasis supplied] An almost identical explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sified under Chapter 39. 29.We however find it difficult to accept this submission in the light of the language used in Note 2(b). Note 2(b) excludes from the scope of Section XVII "Parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39)". What we have to examine is the scope of the last part of the Note. Admittedly, there are two ways of interpreting this phrase. The interpretation suggested by the Revenue is to read the exclusion of "similar goods of plastics", in synchrony with the exclusion that applies to the goods of base metal. In this respect, he drew our attention to the further explanation that is provided on Note 2(b), where number plates are given as an example and it is further provided that "such goods of base metals fall in Chapter 83, and similar goods of plastics fall in Chapter 39". According to the Revenue, this makes it amply clear that the "parts of general use" includes name plates of both, base metal and plastic and therefore fall out of the scope of Section XVII. 30.We are not impressed with this submission. It is true that on first blush, it appears that if the base metal name plate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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