1. The appellants manufacture power driven pumps for handling water falling under heading No. 84.13 of Central Excise Tariff Act, 1985.
Power driven pumps are exempted from payment of central excise duty under Notfn. No. 46/94-CE., dated 1-3-94 read with Notfn. No.95/94-C.E., dated 25-4-1994, Notfn. No. 56/95-C.E. dated 16-3-1995 and Notfn. No. 8/96-CE., dated 23-7-1996. In terms of amended Notification No. 95/94-CE, dated 25-4-1994, barring (a) Electrical stampings & laminations (b) Bearings and (c) Winding Wires. Other goods used within the factory of production in the manufacture of pumps falling under Sl.
No. 4 of Notification No. 46/94-CE. were exempted from payment of duty.
The appellants manufacture Guide Bushes for use in the manufacture of pumps in their factory. The dispute in the present case is whether the Guide Bushes designed to support and guide the pump rotor system are bearings and covered by Heading No. 84.83. The appellants' contention is that such Guide Bushes made in their factory and used in the pumps are not Bearings and are not covered by Heading No. 84.83. They contended that the parts of power driven pumps viz. Guide Bushes which are loosely called by them as bearings such as packing bearing, intermediate bowl bearing, screw bearing etc. were not bearing but were Guide Bushes.
2. Periodical show cause notices were issued by the department from time to time claiming that Guide Bushes are Bearing and although such Guide Bushes are made and used in power driven pumps in their factory, duty was payable on them in terms of Notfn. No. 46/94-C.E. read with Notfn. No. 95/94-C.E. In the order against show cause notice issued by the department bearing C No. CE/13/(II)/R-II/KDH/92/204, dated 28-3-95 the Id. Asstt. Commr. held that the Guide Bushes manufactured by the appellants for power driven pumps were actually bearings and the same were not entitled to get the benefit of exemption under Notfn. No.95/94, dated 25-4-1994. Against the said order passed by the Id. Asstt.
Commr., the appellants filed an appeal before the Id. Commr. of Central Excise (Appeals), Kolkata, who in his order dated 30-9-974ssued a detailed order examining submissions made in their appeal petition together with experts' opinions and came to the conclusion that the so called bearings made by the appellants could not be treated as parts of power driven pumps used in the power driven pumps and were exempted from payment of duty. The order of the Id. Asstt. Commr. was set aside and the appeal was allowed (Page 32 to 41 of the Paper Book).
The department did not file any appeal against the order and the said order reached its finality.
3. Seven similar show cause notices issued for different periods were decided by the Id. Asstt. Commr. in favour of the appellants. Against those show cause notices seven appeals were filed by the department to the Commissioner of Central Excise (Appeals), Kolkata. The Id.
Commissioner of Central Excise (Appeals) under his order-in-appeal dated 18-10-2001 allowed the appeals filed by the department contrary to the earlier order-in-appeal dated 30-9-97 decided by the Commissioner of Central Excise (Appeals), Kolkata (Page 134 to 137).
4. The appellant submits that the demand is not raisable contrary to the appeal order passed by the Commissioner (Appeals), if no farther appeal is filed to the Hon'ble Appellate Tribunal by the Central Excise department. The order-in-appeal not having been questioned by the department under Section 35B(2) or Section 35E of the Central Excise Act, became final and binding on the central excise authorities. In the present case, the reasoned and detailed order of the Commissioner (Appeals), has not even been discussed and it has not been shown as to how the order of the Commissioner (Appeals) was not correct. Such order without even considering the Commissioner's (Appeals) order is not maintainable. Classification list once approved is not to be reviewed unless there is change in factual situation or in law. The following decisions are cited in this regard : Since in the present case no appeal was filed against the order of the Commissioner of Central Excise (Appeals), Kolkata dated 30-9-97, the order of the Commissioner (Appeals) was not proper and valid. It is further submitted that the Commissioner of Central Excise (Appeals) has not dealt with7 various points which has been considered by the Id.
Commissioner to decide the classification of the Guide Bushes not to be covered by Heading No. 84.83. The Id. Commissioner of Central Excise (Appeals) in his order dated 30-9-97 also considered the Technical Experts' opinions in deciding this case. He has not dealt with anything leading to change in factual situation or in law.
5. The observation of the Id. Asstt. Commissioner quoted by the Id.
Commissioner that the bushes are also bearings when qualifying ISI specification, is not proper and correct inasmuch as HSN has specifically mentioned that bearings falling under Heading 84.83 consist of rings of antifriction metal or other metals, (e.g. sintered metal or plastic). The guide bushes made by the appellants are exclusively for use in their pumps according to their specifications, designs and requirements. They are solely and principally for use in power driven pumps. They do not contain any ring of antifriction metal or other materials and they cannot be treated to be bearings. The guide bushes are exclusively used in the manufacture of power driven pumps in their factory. There is no mention of I.S.S. 4774-1968 in HSN.6. The appellants contended that they are covered by the decision of the Hon'ble Supreme Court in the case of Jain Engg. Co. - 1987 (32) E.L.T. 3 which was also considered by the Commissioner (Appeals) in his order dated 30-9-97. They rely upon the following decisions of the Tribunal.
(i) 2001 (130) E.L.T. 173 (T) = 2000 (40) RLT 399 (CEGAT) M.M. Sintered Products v. CCE, Nagpur Classification - Sintered bushes of Iron and Copper are not plain shaft bearings as the same do not have antifriction rings and hence are not covered by SH No. 8483. 00.
(ii) 2001 (131) E.L.T. 697 (T); 2001 (44) RLT 357 (CEGAT), CCE, Chandigarh v. Gabrial India Ltd. Bushes and Thrust Washers are not plain shaft bearings. They are not classifiable under heading No. 84.83 of CETA, 1985 in absence of ring of antifriction metal or other material classifiable under the heading in which the machine for which they are used is classifiable - appeal was allowed.
The decision in the case of Gabrial India Ltd. (supra) has been confirmed by the Hon'ble Apex Court.
7. Since the Guide Bushes manufactured by the appellants and used in their factory do not contain any ring of antifriction metal or other material, they are not classifiable under Heading No. 84.83. They are classifiable under Heading No. 84.13 as power driven pumps in which they aroused.
8. Regarding mentioning of the guide bushes manufactured specifically for use in the pumps made by them in their factory, as packing box bearing, bowl screw bearing, cutless bearing etc., it is respectfully submitted that it has been correctly held by the Commissioner (Appeals) in his order dated 30-9-97 that the word "bearing" was loosely used as bearing, but this was, in fact, not bearing and the same did not fall under sub-heading No. 84.83. Reference is invited to the decision of the Hon'ble Apex Court in the case of Purewal Associates Ltd. v. CCE - 1996 (87) E.L.T. 321 wherein it has been held that Lid screw, Barrel screw, Briege screw and Dial key screw used in manufacture of watches are classifiable under Tariff Item 68 of the erst- while Central Excise Tariff and not under T.I. No. 52 as "Screws". In the case of fain Engg.
Co. (supra) it has been obtained by the Honble Apex Court that as the functions of the bushings are the same as that of bearings, sometimes bushings are called bearings, as pointed out by the appellate tribunal.
But when these two articles are known in the market by two different names it is difficult to uphold the contention that they are same and identical, even though they perform the same function. The Hon'ble Apex Court held that bushes and bearings" are not same and identical. Hence merely because the guide bushes were termed by the appellants as different types of bearings, they are not bearings inasmuch as they do not satisfy the definition of bearings as covered by the explanatory note to H.S.N. and which has been held to be classifiable under the classification of machines to which such bushes pertain i.e. Heading No. 84.13 and not under Heading 84,83. The order of the Id.
Commissioner is not therefore sustainable.
9. Shri N.K. Mishra, Id. JDR for the Revenue submits that the Commissioner (Appeals) has correctly allowed the appeal filed by the Revenue inasmuch as the disputed goods in question are nothing but bearings which are excluded from the purview of the exemption notification in question.
10. We have considered the submissions made from both the sides. The dispute relates to the availability of exemption notifications which allowed the parts of PD pumps, used captivity, to be cleared without payment of duty except the bearings. The appellants' contention is that though the disputed items have been loosely named by them as bearings, but in fact the same are not bearings but bushes and as such the exclusion clause does not apply to them. They have strongly relied upon the earlier order-in-appeal dated 10-11-97 passed by Commissioner (Appeals) vide which he has held that the goods in question are bushes and not bearings. The said decision passed by the Commissioner (Appeals) is a detailed order and has been passed after taking into account the opinions given by various experts and examining the applicability of the goods in question. We would like to reproduce the relevant portion of the said order of the Commissioner (Appeals) for better appreciation :- "From the foregoing, I find that there is lot of force in the appellants arguments that though they have described some parts of P.D. Pumps manufactured by them and used in the manufacture of P.D. Pumps for handling water are mentioned loosely as 'Bearings', but these are in fact not 'Bearings' and neither these fall under S.H. 84.82 or 84.83. I also find that the Tariff Heading 84.13 deals with pumps for liquids whether or not fitted with measuring device, Liquid Elevators and parts thereof and does not deal with 'Bearings'. The appellant have all along been manufacturing P.D. Pumps and parts for use in their factory in the manufacture of said pumps. Further it is seen that Notfn. No. 95/94, dated 25-4-94 exempts all 'Goods' (and not parts of P.D. Pumps) falling under Ch.
Headings 72, 73, 82, 83, 84 or 85 other than Electrical Stamping and lamination, Bearings and Winding wires from payment of duty if these are used within the factory of production in the manufacture of P.D. Pumps primary designed for handling water falling under S.H. No. 84.13. Therefore classifying the parts which are loosely described by the appellant as bearings under S.H. No. 84.13 as attempted in the SCN or in the impugned order is not only unjustified but is without any basis whatsoever. More, from the expert's opinions, referred above, it is seen that these parts performing the functions of 'Bushes' and from the letters from dealers submitted by the appellant, it is seen that no such bearings as manufactured by the appellant are sold in the market. Moreover, from the two judgments of Hon'ble Supreme Court referred by the appellant as mentioned above, it is clear that 'Bushes' are not 'Bearings'. Mere mention of the word 'Bearings' at the end of a particular part does not make them classifiable as 'Bearings' either under S.H. 84.82 or 84.83, which are the only two headings in the CETA under which 'Bearings' are assessable to duty and can be treated as 'goods' for the purpose of denial of exemption Notfn. can change the Tariff Heading of Central Excise Tariff, under which the 'goods' fall and create another subheading, as has been done in this case by the Asst.
Commr. and duty has been demanded classifying these bearings under Ch. S.H. 84.13, which is not the Tariff Heading for 'Bearings' as per Central Excise Tariff, as already stated elsewhere and the very idea is misconceived. Only those 'Bearings' can be considered as 'Goods' for denial of exemption under Notfn, No. 94/95, which fall under S.H. 84.82 or 84.83, as already stated above and no other Chapter Heading. This case is also similar to the case of Purewal Associates Ltd. v. CCE reported in 1996 (87) E.L.T. 321 referred above, wherein Supreme Court in similar situation where parts of watches ended with the word 'screw', has held that they were not classifiable under the erstwhile Tariff Item 52, where 'screws' were mentioned but distinct and separate.
In view of the foregoing, the impugned parts even though loosely mentioned as 'Bearings' by the appellant cannot be treated as 'Goods' falling either under Chapter S.H. No. 84.82 or 84.83 for the purpose of denial of exemption under Notfn. No. 94/95, dated 25-4-94 and these have to be treated only as Goods/Parts of P.O. Pumps used in the manufacture of P.O. Pumps and exempted from payment of duty under the said notification. Accordingly, I set aside the impugned order-in-original and allow the appeal.
11. The appellant's contention is that the above order passed by Commissioner (Appeals) was accepted by the Revenue and no appeal was filed there against. Following the said order of Commissioner (Appeals) Asstt. Commr. in the present case dropped all the demands. It is the case of the appellant that inasmuch as the issue was finally decided by the order of Collector (Appeals), which became final, not having been questioned by the department before the appellate forum, it was not open to the Revenue to take a different stand. For the above proposition they relied upon the Hon'ble Patna High Court's decision in the case of Hindusthan Malleable and Forgings Ltd. v. UOI - 1992 (58) E.L.T. 516 (Pat). It was held by the Hon'ble High Court that demand is not raisable contrary to appellate order passed by the Commissioner (Appeals), if no further appeal has been filed with the Appellate Tribunal by the department and the order of Commissioner (Appeals) is binding on the excise authorities. The Asstt. Commr. has dropped the demand by following the said order of Commissioner (Appeals) and in our views that was the right course available to the Asstt. Commr.
12. We also note that in the present impugned order Commissioner (Appeals) has not discussed the technical details and the experts opinion given by various persons, which formed the basis of the earlier order of Commissioner (Appeals). We would reproduce the relevant paragraph from the impugned order of Commissioner (Appeals) :- From the facts-in-issue it reveals that fundamentally the entire dispute originates from the nomenclature of the impugned goods. The adjudicating authority has observed "I have examined the technical opinion as also nomen- clature in H.S.N, with reference to I.S.I, specification IS : 4774 - 1968 and I am of the opinion that any kind of bearings with a suitable prefix indicating the area of application continues to remain bearings and bushes are also bearings when qualifying I.S.I., specifications are mentioned.
It appears therefore, had it been already examined by Commr.
(Appeals) for identical goods, it would be not necessary for the original authority to re-examine the goods. It is also a fact that the "bearings" as a whole are excluded from the purview of the said notfn. as per the specified list here is.
In view of the discussions made hereinabove, I find it just and proper to allow the instant applications filed by Revenue and set aside the impugned Orders-in-Original.
A reading of the above would show that Commissioner (Appeals) has passed the order in a cryptic manner and has commented upon the earlier order of the Commissioner (Appeals) by merely observing that the goods are in fact bearings, but has not given any reasons for taking a view different than the one taken by the Commissioner (Appeals) in his earlier order.
13. It is also seen that the Tribunal in the case of M.M. Sintered Products v. CCE, Nagpur - 2001 (130) H.L.T. 173 (T) - 2000 (40) RLT 399 (CEGAT) has held that sintered bushes of iron and copper are not plain, shaft bearing as the same do not have rings and no evidence has been adduced by the department to show that they were commercially known as bearings. Similar is the decision of the Tribunal in the case of CCE, Chandigarh v. Gabrial India Ltd. - 2001 (131) E.L.T. 697 (T) = 2001 (44) RLT 357 (CEGAT-Delhi). It was held that bushes and washers are not plain bearings in the absence of ring or any anti-friction metal or other materials. The said order of the Tribunal has been confirmed by the Hon'ble Supreme Court as reported in 2002 (140) E.L.T. A154. In the instant case also the appellant has claimed that the items in question are not bearings inasmuch as there are no rings of anti-friction metal.
The said stand of the appellant has not been controverted by the Revenue by production of any evidence to the contrary.
14. In these circumstances we set aside the impugned order and allow the appeal with consequential relief to the appellants.