Full Judgment
The appellant had canvassed classification under Chapter 90 of the Central Excise Tariff. The impugned order also notes that the item consists of number of parts. Nevertheless, classification under tariff item 85.05 was approved because "as a whole it is electromagnet as it creates a magnetic field around it with the passage of electric current through the coil surrounding core lamination." 2. During the hearing of the appeal, learned Counsel for the appellant took us through the various chapter headings and chapter notes and pointed out that the very issue had came up for consideration before this Tribunal and the Tribunal had decided that the correct classification would be under heading 90.33 (Pal Brothers Works v. CCE, Delhi-1, [2002 (53) RLT 1009 (CEGAT-Del)]. We have heard the learned SDR also.
3. This Tribunal's aforesaid order in the case of Pal Brothers Works related to the classification of the same product, namely, electromagnet assembly. The Tribunal ordered classification under Chapter 90 with the following observations: "4. We have considered the submissions of both the sides. The main argument of the Appellant is that the product manufactured by them is not an electromagnet but it is an electromagnet assembly combining two sub-assembled products namely -- Electromagnet and power factor. The learned Advocate has also emphasized that the Commissioner (Appeals) has accepted in the impugned order that the goods are parts of electric supply meter and as such would fall under Heading 90.33 of the Tariff. The Revenue's contention is that the principal of the impugned product is provided by electromagnet which is specifically covered by Heading 85.05. We observe that the Revenue has not disputed that the impugned product is something more than electromagnet as power factor has been attached to the same. We find substance in the submissions of the learned Advocate that the impugned product is not electromagnet simplicitor but a combination of electromagnet and power factor. It has also not been disputed by the Revenue that the impugned product is a part of Electricity Meter. In fact, the Commissioner (Appeals) has given his specific finding that "there is no doubt that the impugned goods are parts of electric supply meter." As per McGraw Hill Dictionary of Scientific And Technical Terms "Electromagnet" means a magnet consisting of a coil would around a soft iron or steel core; the core is strongly magnetized when current flows through the coil, and is almost completely demagnetized when the current is interrupted. According to the said Dictionary "Power Factor" is the ratio of the average (or active) power to the apparent power (root-means-square voltage runs current) of an alternating current circuit. As the impugned goods is not electromagnet simplicitor and is "part" of electric meter, we are of the view that it is correctly classifiable under Heading 90.33 which covers parts and accessories (not specified or included elsewhere in this Chapter) for machines, appliances, instruments or apparatus of Chapter 90 since electric supply meters are classifiable under Heading 90.28 of the Tariff Note 2 (a) to both Chapter 85 and Chapter 90 is not attracted as the impugned goods is not a goods included in any of the headings of these two Chapters. Accordingly, we set aside the impugned order and allow the appeal.
4. The issue of classification thus remains covered in favour of the assessed. Accordingly, the appeal is allowed after setting aside the impugned order.