Order

1. These appeals raise an interesting and important question: as to whether persons like the assessees, in these cases, who manufacture “lifting machinery”, which machinery, it is argued, is the essential part which actually brings up and brings down an elevator/lift, is liable to be classified under Chapter Sub-Heading 8428.00 or 8431.00.

“8428.00 Other lifting, handling, loading or unloading machinery (for example, lifts, escalators, conveyors, teleferics)

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8431.00 Parts suitable for use solely or principally with the machinery of Headings 84.25 to 84.30.”

2. Both the assessees before us contend that despite the fact that they produce components of lifting machinery separately, these are all cleared at the factory gate under a single contract number and ultimately form the essential part of what is finally shown, by way of a lump sum price as a complete elevator or lift.

3. The learned counsel for the Revenue, on the other hand, contends that these are only parts that are sold at the factory gate which are suitable for use with the machinery under Chapter Heading 84.28 and therefore are liable to be classified under Sub-Heading 8431.00. The period with which we are concerned in these appeals is, in Civil Appeal No. 445 of 2007, from 1-3-1987 to 20-2-1995, and in Civil Appeal No. 10633 of 2014, from April 1986 to 1-3-1995. The reason why these appeals are not concerned with the periodafter 1-3-1995 is that whether these components are classified under Sub-Heading 8428.00 or 8434.00 after 1-3-1995, the duty is the same. However, for the period in question, if classification takes place under Sub-Heading 8428.00, the duty at one point of time is 15% as opposed to the duty under Sub-Heading 8431.00, which at one point of time, was 20%. We are informed that for all these years, the duty rates fluctuate but never so as to bring Sub-Heading 8431.00 on a par with Sub-Heading 8428.00.

4. The learned counsel for the assessees had argued before both the Commissioner and the Tribunal in the two respective appeals that essentially what was ultimately sold was a complete lift and as a complete lift was immovable property, since all the components were fixed in the premises of the customer, it would not be classified as such in an excise tariff, which deals only with goods. However, the very fact that the expression “lifts” occurs in Sub-Heading 8428.00 would necessarily mean that it is not immovable property that is sought to be taxed under the Central Excise Tariff but the price of components which make up the ultimate lift and that being so, it should fall within Sub-Heading 8428.00 and not 8431.00.

5. What has been held by both the Commissioner and the Tribunal (2007) 208 ELT 114 (Tri) (2014) 309 ELT 129 (Tri) in the two judgments which are under appeal before us is essentially that since the appellant assessees do not, in fact, manufacture every single component that goes into a lift, neither Note 4 of Section 16 nor Interpretative Note 2(a) would apply, since what has been cleared is only certain parts of the complete lift. It was concurrently found by the authorities that the Revenue's case was made out, and that the component parts manufactured by the assessees would fall within Sub-Heading 8431.00.

6. The learned counsel for the assessees, however, raised for the first time before us a new argument. According to them, what they, in fact, manufactured was lifting machinery as being something apart from and different from a complete lift or elevator. This being the case, according to them, Note 4 of Chapter 16 would cover their case as individual components manufactured under one contract are intended to contribute together to a clearly defined function covered by Sub-Heading 8428.00 viz. lifting machinery. This being the case, according to them, Note 4 of Chapter 16, if correctly applied, would necessarily lead to the conclusion that the components manufactured by them would fall only under Sub-Heading 8428.00 and not Sub-Heading 8431.00. They also made another submission for the first time before us. They said, in any event, Sub-Heading 8431.00, which refers to parts suitable for use solely or principally with the machinery of Sub-Heading 8428.00, would only refer to parts that were used after a complete lift was already set up and not before. They contrasted the language of Sub-Heading 8431.00 with the language of Sub-Heading 8476.91, which simply states “parts of machines of Sub-Heading 8476.11”. The contrast in the language, according to them, makes it clear that the parts spoken of in the latter entry could well be parts of a machine itself, as opposed to Sub-Heading 8431.00, where the parts have to be suitable for use only with the machinery that is already installed.

7. The learned counsel for the Revenue submitted that on what was argued, the decision of the authorities below as well as the Tribunal in both the appeals were absolutely correct and did not need any further review by this Court. He also stated that if this Court were to permit the assessee to turn around at this juncture and argue something new which had not been argued before the Commissioner or the Tribunal, he would be put to a disadvantage and would not be able to give any effective reply.

8. Since we are of the opinion that this is an important question that needs to be determined having reasonably wide ramifications, we would allow the assessees to raise these points on a remand made to the Tribunal in both these cases. This we do also having regard to the fact that the new pleas raised before us are questions of law which need to be answered on the same set of facts, and no new or additional facts need to be pleaded in order that the assessees make out their case. This being the case, we, therefore, set aside both the Tribunals judgments (2007) 208 ELT 114 (Tri) (2014) 309 ELT 129 (Tri) in the two appeals before us and remand these cases for a fresh hearing before the Tribunal allowing both sides to take up all points which arise on the facts of these appeals. Both the appeals are disposed of accordingly.

9. Since these are old matters, the Tribunal is requested to take up and dispose of these matters within six months from the date on which this order is communicated.