Case Law Details
The issue under consideration in this appeal is whether the goods manufactured by the appellant are liable to be taxed as ‘Parts of Television Receivers’ falling under Tariff Entry 8529 of the Central Excise Tariff contained in the First Schedule to the Central Excise Tariff Act, 1985 (in short ‘the Tariff’) or as ‘Television Receivers’ under Tariff Entry 8528 of the Tariff, for the year 1989-90.
The appellant is a manufacturer of various components of television sets. The components are manufactured at its factory at Delhi. Thereafter, the said components are assembled in the same factory for the purpose of testing of each component and for checking the working of each television set. Thereafter the television sets so assembled are disassembled and then transported as parts to various satellite units of the appellant company at different places. In these satellite units, the separate components are re-assembled and, as per the appellant, some further processes are carried out in order to make those sets marketable. The issue is whether such components, which are manufactured at and transported from the factory of the appellant at Delhi are liable to be assessed as ‘Television Receivers’ or as ‘Parts of Television Receivers’.
the question that arises here is whether the goods produced by the appellant can be described as ‘parts’ under the goods included in any of the headings of Chapter 84 or 85. In this respect, it is the contention of the appellant that the goods produced by them shall inevitably have to be considered as ‘parts’, as they are unable to receive a picture, which is said to be a fundamental requirement for a good to be considered as a ‘Television Receiver’. At the first sight, one may find force in this contention. As the test in Section Note 2 is simply that of whether the goods in question are ‘parts’, it may be convincingly said that as the goods transported by the appellant are incapable of functioning as ‘Television Receivers’, they shall have to be considered to be ‘parts’ thereof.
24. However, on closer scrutiny of the unique facts of this case, it is our view, the goods of the appellant may not be said to be ‘parts’ as per Section Note 2 to Section XVI of the Tariff. The appellant not only used to assemble all parts of the Television Receivers and make complete television sets, but the said Television Receivers were also operated in the manufacturing unit of the appellant and thoroughly checked and only upon it being confirmed that the Television Receivers were complete in all respects, they were disassembled and along with relevant material and individual serial numbers, sent to the various satellite units. Once the Television Receivers are assembled or are made completely finished goods, the manufacturing process is over and we are not concerned as to what happens subsequently. Whether they are sent to the satellite units of the appellant in its complete form or in a disassembled form is irrelevant.
Looking to the facts of the case, it is not in dispute that complete Television was manufactured by the appellant and therefore, in our opinion, the Revenue had rightly classified the goods- product as complete Television set even though it was subsequently disassembled.
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