IMPORTANT POINT
Plastic name plates could not be included as ‘parts’ of the motor vehicles, they would most certainly have been covered by the broader term ‘Accessory’ and cannot be excluded from Chapter 87, Section XVII.

Headnote:Central Excise Act, 1944 – Headings 87.08 and 87.14 – ‘Parts and accessories’ of motor vehicles – Tribunal has only examined whether the name plates can be considered `parts’ of motor vehicles and not at all considered validity of including these name plates as ‘accessories’ – Tribunal erred in rejecting the claim of inclusion in ‘parts and accessories’ without considering the question of ‘accessory’ for the purposes of headings 87.08 and 87.14. (Paras 9, 11 and 20) Words and Phrases – Accessories – An ‘accessory’ by its very definition is something supplementary or subordinate in nature and need not be essential for the actual functioning of the product – Name plates add to the convenient use of the motor vehicle and serve a very useful purpose inasmuch as it gives an identity to the vehicle – Thus, even if the plastic name plates could not be included as ‘parts’ of the motor vehicles, they would most certainly have been covered by the broader term ‘Accessory’. (Para 20) 1989 Supp (1) SCC 128; (1976) 2 SCC 273; (1991)1 SCC 514; 1995 Supp (2) SCC 267; (2006) 7 SCC 735 – Relied upon. Code of Civil Procedure, 1908 – Section 109 – When a point was raised before the original and appellate authorities who rejected the same and then it was not raised before the Tribunal, the Superior Court may remit the matter to the Tribunal or decide it itself. (Para 22) Harmonized Commodity Description and Coding System – Section XVII, Explanatory Notes – 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)” – In absence of any definition or reference in Chapter 39 regarding name plates, etc., these cannot be excluded from Chapter 87, Section XVII. (Paras 23, 28, 30 and 31).
       Facts of the case:
       The appellant is a small-scale unit, manufacturing plastic name plates for motor vehicles in accordance with the specifications and designs supplied by the customers, who are the vehicle manufacturers and selling the entire production to the vehicle manufacturers alone. Between 1986 and 1994, the classification of name plates under headings 87.08 and 87.14 were approved by the Department. On 02-08-1994, the Assistant Collector of Central Excise, Ambala proposing to re-classify the name plates under heading 39.26 as articles of plastics issued a show cause notice. The notice was however subsequently dropped and an order-in-original dated 08-11-1994 was passed stating that the appropriate classification of the name plates was under Chapter 87. Subsequently, the Commissioner of Central Excise, New Delhi exercising powers under section 35E of the Act reviewed the above order and filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) by the order dated 31-10-2000 allowed the appeal of the Revenue and classified the plastic name plates under heading 39.26. Aggrieved by the order of the Commissioner (Appeals), the appellant filed an appeal before the Tribunal, which was rejected by the impugned order.
       Findings of the Court:
       Tribunal erred in rejecting the claim of inclusion in ‘parts and accessories’ without considering the question of ‘accessory’ for the purposes of headings 87.08 and 87.14. Even if the plastic name plates could not be included as ‘parts’ of the motor vehicles, they would most certainly have been covered by the broader term ‘Accessory’. In absence of any definition or reference in Chapter 39 regarding name plates, etc., these cannot be excluded from Chapter 87, Section XVII.

JUDGMENT

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 Tribunal (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

1.The appellant is a small-scale unit, manufacturing plastic name plates for motor vehicles in accordance with the specifications and designs supplied by the customers, who are the vehicle manufacturers. The entire production of the appellant is sold to the vehicle manufacturers alone.

2.Between 1986 and 1994, the classification lists filed by the appellant claimed the classification of name plates under headings 87.08 and 87.14 and the same were approved by the Department from time to time. On 02-08-1994, a show cause notice was issued by the Assistant Collector of Central Excise, Ambala proposing to re-classify the name plates under heading 39.26 as articles of plastics. The notice was however subsequently dropped and an order-in- original dated 08-11-1994 was passed stating that the appropriate classification of the name plates was under Chapter 87.

3.Subsequently, the Commissioner of Central Excise, New Delhi exercising powers under section 35E of the Act reviewed the above order and filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) by the order dated 31-10-2000 allowed the appeal of the Revenue and classified the plastic name plates under heading 39.26. Aggrieved by the order of the Commissioner (Appeals), the appellant filed an appeal before the Tribunal, which was rejected by the impugned order.

4.The Tribunal rejected the appeal of the appellant primarily by recording the following findings :

a. It held that “a motor vehicle is a complete vehicle without affixation of emblems or name plates” and that “it cannot be treated as a part without which the motor vehicle is not complete”;

b.It distinguished the case of Collector of Central Excise, Calcutta v. Jay Engineering Works Ltd., Calcutta1 [1989 Supp (1) SCC 128] stating that it examined name plates as inputs and not as parts of the fan;

c.The fact that a name plate can be used only in respect of the product whose name it carries does not make it a part of the motor vehicle ;

d.That Heading 39.26 specifically covered articles of plastics and since it was not in dispute that the impugned goods were made of plastics, they were classifiable only under heading 39.26.

5.Thus, the essential question for consideration is :

Whether these ‘plastic name plates’ are to be classified under headings 87.08 and 87.14 as ‘parts and accessories’ of motor vehicles or under heading 39.26 as other articles of plastics?

6.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 :

7.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"

8.The relevant portions of heading 39.26 are reproduced below for reference: 39.26 Other articles of plastics.

ISSUES FOR DETERMINATION

9.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’

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2007 Supreme(SC) 587

2007(4) Supreme 189SUPREME COURT OF INDIAAshok Bhan & Dalveer Bhandari, JJM/s Pragati Silicons Pvt. Ltd — PetitionerversusCommissioner of Central Excise, Delhi — RespondentAppeal (Civil) 5345 of 2001Decided on : 26-04-2007

IMPORTANT POINTPlastic name plates could not be included as ‘parts’ of the motor vehicles, they would most certainly have been covered by the broader term ‘Accessory’ and cannot be excluded from Chapter 87, Section XVII.

Cases Referred (5)

2007(4) Supreme 189
SUPREME COURT OF INDIA
Ashok Bhan & Dalveer Bhandari, JJ
M/s Pragati Silicons Pvt. Ltd — Petitioner
versus
Commissioner of Central Excise, Delhi — Respondent
Appeal (Civil) 5345 of 2001
Decided on : 26-04-2007

IMPORTANT POINT
Plastic name plates could not be included as ‘parts’ of the motor vehicles, they would most certainly have been covered by the broader term ‘Accessory’ and cannot be excluded from Chapter 87, Section XVII.