PRECISION FASTENERS LTD Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS is a revision application (hereinafter called "appeal") filed before the Central Government which under Section 35P of the Central Excises and Salt Act, 1944, stands transferred to this Tribunal to be disposed of as if it were an appeal presented before the Tribunal. It arises out of the combined order -in -appeal Nos. 286/77 and 287/77 dated 20 -4 -1977 passed by the Appellate Collector of Customs and Central Excise, Bombay, which relates to two orders -in -original passed by the Assistant Collector of Central Excise, Division VI, Bombay. Appeal No. ED(SB)(T) A. No. 163/77D, arising out of the same order -in -appeal of the Appellate Collector, and relating to the Assistant Collector's order -in -original No. V(52)l 5 -17/76/1268 dated 27 -1 -1977, has been disposed of separately, as having been withdrawn. This appeal arises out of the order -in -original No. V(Misc.)Coll/19/75 -Pt. II -1375 dated 29 -1 -1977, dealt with in the same combined order -in -appeal of the Appellate Collector.

(2.) THIS case relates to the question of excisability with reference to Item 52 of the Central Excise Tariff Schedule of certain goods manufactured by the appellants. These comprise four items, which they have designated as follows ; - Cylinder stud bolts Main bearing stud Cylinder head stud Long stud It was held by the authorities below that these fell under the said Item 52, as "bolts and nuts, threaded or tapped, and screws...". As against this, it was the contention of the appellants that the goods were ' 'high tensile industrial fasteners", and that these were not classifiable under Item 52, as they were specially designed for use in automobiles and performed functions apart from the function of fastening.

(3.) APPEARING for the appellants, Shri Taraporevala argued the matter at length, and made several submissions. He pointed out that in a classification list dated 11 -10 -1974, the appellants had attached a list of various goods manufactured by them, including the four in question. This classification list was approved on 28 -8 -1975, with the observation that various articles mentioned in the list (including the four now under consideration) were "non -excisable under T.I. 52". (In passing, it must be stated that the photocopy of the classification list filed by the appellants is very indistinct, and much of what has been stated above is based on Shri Taraporevala's statements made at the Bar). Thereafter, there was further correspondence and by a letter dated 13/16 -8 -1976, the Assistant Collector modified the approval accorded earlier in respect of the four items mentioned above and held that they attracted duty under Item 52. This was followed up by a letter dated 20 -8 -1976 from the Superintendent of Central Excise, Range No. VI, Thana Division, titled "Notice to show -cause -cum demand under Rule 10 of C. Ex. Rules, 1944", requiring the appellants to show cause why an amount of Rs. 5,32,165.65, calculated as the differential Central Excise duty, should not be recovered from them. On an appeal being made, the Appellate Collector held that the Assistant Collector's order was not a speaking order and he therefore remanded the matter to the Assistant Collector for de novo proceedings. Thereafter, the Assistant Collector passed a further order dated 29 -1 -1977. In this order the Assistant Collector referred to the contention of the appellants that the four products had definite functional utility and fastening by way of threads was a secondary function. The appellants had also stated that the Assistant Collector had no jurisdiction to review the decision of the earlier Assistant Collector and re -classify the above four products. Rejecting these contentions, the Assistant Collector held that the products performed the function of fastening alone and after being so fastened they had no other functions to perform in the automobile vehicles in which they were used. He recorded that he had examined the samples of the products and his scrutiny confirmed that the products were meant for fastening two or more parts of an automobile machinery (sic). He confirmed the notice dated 20 -8 -1976 issued by the Superintendent. The appellants went in appeal against this second order. The Appellate Collector held that the basic function of the goods was to fasten various machinery parts. The only difference between normal fasteners and these fasteners was that they were made to the definite specifications on the basis of the requirements of each machine and that they were made out of specific raw material and alloys, so as to impart specific engineering advantages. However, this particular specialised requirement did not take away their basic nature and characteristics as bolts and nuts. They were basically fasteners with specific engineering advantages and hence rightly classifiable under Tariff Item No. 52. With these observations, he rejected the appeal.