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Classification and Dutiability of �Thrust Bearing Assembly�
Central
Excise Circular No. 678 dated 4th December 2002
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 assessees 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 assessees 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 Notification No. 6/2002-GE dated
1.3.2002 (earlier notification being Sl. No. 253 of notification No. 3/ 2001-CE
dated 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 dated 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 notification 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) ELT 0481 (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 notification 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.
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