Circular No. 678/69/2002 – CX
4th December, 2002
F.NO. 154/14/2001 – CX 4
Government of India
Ministry of Finance & Company Affairs
Department of Revenue
Central Board of Excise & Customs
Sub: Classification and dutiability of ” thrust bearing assembly”
I am directed to say that doubts have been raised regarding the classification and dutiability of “thrust bearing assembly” used in submersible power driven pumps. Some field officers have taken the stand that it is a ‘bearing’ falling under sub-heading 8483.90 whereas the assesses are contending that it is merely a part of power driven pump falling under sub-heading 8413.99 and, therefore, exempted from duty.
2. The assesses are contending that Thrust Bearing Assembly is an Integral Part of a Pump Set and should rightly be classified under sub-heading 8413.99. They have relied on the following two CEGAT decisions in their favour:
(i) CALAMA Industries Ltd. Vs. CCE, Bombay-1998(100)ELT(79)(T)
(ii) CC Calcutta Vs. Bharat Sales Corp.-1999(105)ELT7333
3. The matter has been examined in the Board. It is observed that only three parts, of power driven pumps meant for pumping water, are dutiable, as per Serial No.236 of notifn.No.6/2002-CE dt.1.3.2002 (earlier notifn. being Sl.No.253 of notifn.No.3/2001-CE dt.1.3.2001). The three parts
(i) electrical stampings and laminations,
(ii) bearings, and
(iii) winding wires
4. To get expert advice the matter was referred to IIT, Delhi. They have opined that the “thrust bearing assembly” is actually a ‘Hydrodynamic Thrust Bearing’ and that it is neither roller bearing, nor ball bearing (heading 84.82) nor plain shaft bearing (sub-heading 8483.90). Thus, since the item is a ‘bearing’ it is not exempt from duty under notification no 6/2002-CE dt 1.3.2002(sl no. 236). The classification of the bearing under a particular tariff heading is not relevant for its dutiability since column (2) against the said entry of the notfn uses the expression “any chapter”. Further, as per Note 2(a) of Section XVI of the Central Excise Tariff, parts of PD Pumps can be classified under a number of headings, not necessarily under sub-heading 8413.99 [Refer Swelore Engg (P) Ltd vs CCE Ahmedabad – 2000(119)ELT0481(TRIB)]. In the instant case the classification would be under sub-heading 8413.99 itself since ‘hydrodynamic thrust bearings’ are neither covered by heading 84.82 nor by heading 84.83.
5. So far as the two CEGAT decisions, referred to in para 2 are concerned, in the case of CALAMA Industries Ltd. (Civil appeal No.3732-3733 of 1999) the Deptt.’s appeal was dismissed by the Apex Court on 12.7.99 on account of delay only without going into the merits of the case. Further, this case is of no help to the assessees since even after being classified under heading 84.13 as parts, the product remains a type of ‘bearing’ and, therefore, not exempt from duty. So far as the case of Bharat Sales Corp. is concerned the item in dispute was not a bearing but a combination of two parts, namely, shaft and bearing and this decision is, therefore not relevant.
6. In view of the above, “thrust bearing assembly” is a type of bearing classifiable under heading 8413.99 of the Central Excise Tariff and not exempt from duty under notfn no.6/2002-CE dated 1.3.2002 (or its predecessor notifications like 3/2001-CE dated 1.3.2001 etc).
7. Attention in this context is also invited to Modus Operandi Circular No 1/2001-2002 dated 31.5.2001 issued by the DGCEI.
8. Suitable Trade notices may be issued for the information of the Trade.
10. Hindi version will follow.
9. Receipt of these instructions may kindly be acknowledged indicating the date of receipt.