STEFAB (I) LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE issue involved in this appeal filed by M/s. Stefab India Ltd. is whether the Washing Machines manufactured by them are classifiable under Heading No. 84.51 of the Schedule to the Central Excise Tariff Act, as claimed by them, or under Heading 84.50 as Ordered by the Commissioner (Appeals), in the impugned Order dated 23 -5 -1996.

(2.) SHRI M. Chandrasekharan, learned senior Counsel, mentioned that the Appellants manufacture machines for washing (stone washing, enzyme washing, acid washing) dyeing, bleaching, etc.; that these machines have been since 1985 described as industrial Washing Machines and were classified under Tariff Item 68 of the erstwhile Central Excise Tariff and Heading 84.51 of the Present Tariff; that a show cause notice dt. 19 -10 -93 was issued to them for changing the classification of washing machines to Heading 84.50 and for demanding duty short paid during the period April 1993 to September 1993 on the ground that the washing machine were mainly supplied to hotels and hospitals, etc. and as such are laundry type washing machine; that the Assistant Collector, however, classified their product under Heading 84.51, in Adjudication Order No. 67/94 dt. 16 -9 -94 holding that there were both functional and constructional differences between the impugned washing machine and to household or laundry type machine; that on appeal, Commissioner (Appeals) classified the impugned product under Heading 84.50 of the Tariff holding that these are laundry type washing machines. The learned Sr. counsel submitted that the Chief Commissioner, Delhi had examined the classification of the impugned goods and had agreed with the view that these were classifiable under Heading 84.51; that his views were communicated to the Commissioners at Delhi, Chandigarh and Jaipur for information and necesary action; that the Department cannot argue against the classification found correct by the Chief Commissioners. He, further, mentioned that other units producing similar goods in the Commissionerate, of Delhi, Harayana and Rajasthan, are allowed to classify them under heading 84.51 which is discriminatory. The learned Sr. Counsel mentioned that the Appellants had filed a petition in Delhi High Court challenging the Stay Order passed by the CEGAT. The Delhi High Court in Stefab India Ltd. v. U.O.I., 1997 (96) E.L.T. 248 (Del) directed the Tribunal to hear the appeal without insisting upon any deposit on account of non -consideration of Vital and relevant facts i.e. Order of the Assistant Collector in their favour, communication from the office of the Chief Commissioner and the averment that other similar manufactures were being given the benefit of classification under 84.51. He contended that these are vital facts for deciding the appeals also. He also relied upon the decision in Steel Authority of India v. CC Bombay, 2000 (115) E.L.T. 42 (S.C.) wherein Supreme Court held that it is hardly to be supposed that the Customs authorities can take one stand in one State and another stand in other State. The Trade notice issued by one Customs House must bind all Customs authorities."

(3.) HE emphasised that their machines differ from household or laundry type washing machines, structurally and functionally; that the capacity of household washing machine is only 5 Kg whereas the capacity of their machine ranges from 25 Kg to 100 Kg.; the dimension of household washing machine is much less in comparison to their washing machines; that as against weight of 75 Kgs of household washing machines, the weight of their machines ranges from 780 Kg to 1630 Kg; their machines are capable of dyeing requiring a high liquor ratio whereas on account of open type construction, in household or laundry type washing machines, dyeing cannot be done; their machines have inspection windows permitting taking out of articles being dyed, bleached etc., whereas household or laundry type washing machines have no inspection windows; their machines have baffle compartments for special effect during snow wash which is not in household or laundry type machines. The learned Senior Counsel contended that it is not known as to what is the basis of the assumption made by the Commissioner (Appeals) that the principal function of the impugned machine is washing; that no basis has been disclosed to make such an observation; that these machines have special features which make them specifically suitable for carrying out speciality process such as bleaching, dying, enzyme washing etc; that if the findings of the Commissioner (Appeals) is accepted, Heading 84.51 will be redundent as the principal function of washing machine will be washing only. He further mentioned that the findings in the impugned Order that the impugned machines are not akin to goods of Heading 84.51 as they are quite distinct from the example, such as tunnel washers, festoon look washers, J -Boxes, is not tenable as these are only examples and not exhaustive; that it does not mean that there cannot be any other machine classifiable as an industrial washing machine to suit a particular class of consumers; that moreover the impugned machines have mechanical features of the type mentioned in the Explanatory Note to Heading 84.51 in H.S.N. as they have baffle compartments/paddle lifters for obrasion effects and speciality washing like stone wash.