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Apar Private Limited Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1984)(18)ELT491TriDel
AppellantApar Private Limited
RespondentCollector of Central Excise
Excerpt: the invoices as described above. he then informed the appellants that their product was 'steel strips' falling under t.i. 26aa(iii). samples of the appellants' product were also taken and were sent to the chemical examiner for his opinion. the chemical examiner expressed his opinion that the samples conformed to i.s. specification of 'strip' for p.v.c. cables. the asstt. collector of central excise, baroda by his order dated 3-2-1973 held that the appellants' product is steel strip falling under t.i. 26aa and raised demand accordingly. the order was upheld in appeal by the appellate collector of central excise, bombay by his order in appeal dated 1-11-1976. the appellants then filed revision application to the government of india which is the present appeal before us.3. at the.....
1. The question for decision in this appeal, originally filed as Revision Application to Government of India is whether the appellants' goods described in the invoices as "Cable Armouring Flat Wire (Strips) suitable Armouring Cable to IS specification 1554 size 4.085 mm (GI) Trapezoidal armouring wire" merits classification as 'Wires' under sub-item (ia) of T.I. 26AA of the C.E.T. or as 'Strips' under sub-item (iii) ibid as then existing.

2. The appellants manufacture what was described in the invoices as stated above. They claim that their product conforms to I.S.Specification No. 3975-1967 and its dimension as Upper width 4 mm, Inner width 3.4 mm, thickness 0.8 mm. and Radius 10.0 mm. The Superintendent of Central Excise, AR-I, Baroda during his visit to the appellants' factory on enquiry found that the appellants' product was rectangular in cross-section having width ranging 3.8 mm to 4.2 mm and thickness of 0.8 mm; they were manufacturing the same by cold-rolled process. On verification of the appellants' invoices, the Superintendent of Central Excise found that the goods were described in the invoices as described above. He then informed the appellants that their product was 'Steel Strips' falling under T.I. 26AA(iii). Samples of the appellants' product were also taken and were sent to the Chemical Examiner for his opinion. The Chemical Examiner expressed his opinion that the samples conformed to I.S. Specification of 'Strip' for P.V.C. Cables. The Asstt. Collector of Central Excise, Baroda by his order dated 3-2-1973 held that the appellants' product is steel strip falling under T.I. 26AA and raised demand accordingly. The order was upheld in appeal by the Appellate Collector of Central Excise, Bombay by his order in appeal dated 1-11-1976. The appellants then filed Revision application to the Government of India which is the present appeal before us.

3. At the hearing of the appeal, Sh. J.J. Bhatt, learned Counsel for the appellants argued that the appellants' product though described in the invoices as Cable Armouring Flat wire (strips) was in fact not strip even according to Departmental clarification. It was also submitted that the description of the product by the appellants in the invoice as strip was not conclusive because the same product by other manufacturers was described as galvanised flat cables armouring wires.

For this contention Sh. Bhatt produced an invoice from another manufacturer namely, Special Steels Ltd., Dattapara Road, Borivali (East), Bombay. Shri Bhatt further argued that strip should have rectangular cross-section and dimension as given in Tariff Ruling Nos.

23/65, 4/67 & 5/68. He also argued that Steel strips as contemplated under Tariff Item 26AA are the product of hot or cold rolled process and manufactured out of steel ingots or semi-finished steel. The appellants' product conforms to I.S. Specification No. 3975-1967 as per the diagrams set out therein and was not rectangular in cross-section but circular in shape. It was neither sheared nor trimmed. It was also not a product of hot or cold-rolled process but was obtained through drawing of steel round wires through a die of regular size and shape.

For these reasons, the appellants' product would not be classifiable as strip. It was also argued that a product to merit classification as strip, it should be the product of Strip Mill and the appellants' factory was not a strip mill. The appellants' product in common parlance was not known as strip; in a market one could not get appellants' product merely asking for a strip and would be required to especially ask for Armour strip and then only could get the same from the seller. Sh. Bhatt also argued that the lower authorities were in error in blindly relying on Chemical Examiner's opinion which was not of any value. He further argued that according to amended tariff the appellants' product would not merit classification as strip but would be classifiable as wire. He further argued that 'strip' as defined in the Tariff Item 26AA is covered by the ISI specification 1730-1961 whereas the product in question namely the armour strip is covered by the ISI specification 3975-1967. Sh. Bhatt in support of arguments relied on Collector of Central Excise, Pune v. M/s Tigrania Metal & Steel Industries, Nasik [Appeal No. ED(SB)(T) 125/1982-B Order No.698/1983-B, dated 17-10-1983.] 5. Sh. V. Lakshmi Kumaran, learned S.D.R. opposing the arguments of Sh.

Bhatt, submitted that the appellants' product admittedly according to invoices was armour strip. He argued that armour strip had first to be strip before it could be called armour strip. There could be no difference in classification of strip and armour strip. The appellants could not rightly urge that armour strip was different from strip for the purposes of classification under the Central Excise Tariff. He submitted that the appellants' product was rolled strip and therefore the mere fact that it had not been manufactured in a strip mill would not make any difference. He strongly defended the order of the Appellate Collector, which he said was based on appellants' own invoice descriptions, and was supported by Chemical Examiner's opinion.

6. Questioned, why the definition of strip as set out in the present tariff as amended in 1983 and the earlier clarifications of the Board did not squarely cover appellants' product. Sh. Lakshmi Kumaran submitted that possibly a product like the one manufactured by the appellant was not known to Government of India or the Central Board of Excise & Customs. Sh. Lakshmi Kumaran was specifically asked by the Bench whether this submission could be recorded in the order, he replied that he had no objection in this submission being recorded and he reiterated the same. He also argued that the Bench could not make use of the amended tariff for deciding the present appeal, because the Bench in C.C.E., Pune v. M/s Tigrania Metal & Steel Industries, Nasik's case (Supra) had not looked into Tariff Item No. 25 as brought in by Finance Act, 1983. Shri V. Lakshmi Kumaran in support of his arguments relied on M/s Dunlop India Ltd. v. Union of India-1983 E.L.T. 1566(SC); M/s Delhi Cloth and General Mills v. State of Rajasthan-19%0 E.L.T. 383 and M/s Union Carbide Co. v. Asstt. Collector of Central Excise and Ors.- 7. While we do not make any use of Tariff Item 25, as amended in 1983 by adding explanation defining Iron and Steel Products, we note that under Explanation (XIV) "Strips' means hot or cold-rolled products, rolled approximately in rectangular cross-section of thickness usually 10 mms and below with mill, rolled trimmed or sheared edges and supplied in coil or flattened coil (straight length) form but excludes hoop and skelp". Under the Departmental clarifications which held the field before the amendment, 'strip' was word to word similarly described. (Madurai Collectorate Trade Notice No. 214/1982, dated 23-10-1982) available at pages 598 & 599 of Central Excise Tariff of India 1983-1984, 10th Edn. Central Law Office, New Delhi. The same description is also available in C.B.E. & C's Circular dated 13-4-1982 (available in Collectorate of Central Excise, Pune v. M/s Tigrania Metal & Steel Industries and was filed by the Department in that case, as this case was not reported the file was called for and examined). It appears that the present amendment gives statutory recognition to the earlier departmental description of strip. Now according to present definition ans earlier (definition) description, strip must be hot or cold rolled product. The appellants contend and the Department does not dispute that the appellants' product is neither of the two. Strip must be rolled approximately in rectangular cross-section. The appellants contend that the appellants' product is not rectangular but circular and has filed a copy of I.S. Specification showing such product (Armour strip and tapes are shown to be circular). The Asstt Collector of Central Excise, in his order says that the Superintendent found the product to be rectangular in cross-sect on but this does not find support from the specification to which the appellants' product conforms. The Appellate Collector of Central Excise based his findings only on the description of the goods and Chemical Examiners' report In the present appeal, we will not enter into the question what weight is to be attached to the Chenncal Examiner's opinion. A copy of his report has been placed before us The material part of the opinion only says that the dimensions of the samples declared by the party conform to those given in Table II (i.e. of strip of the PV.C. cables) This opinion does not advance the Department's case because the appellants themselves admit that their product conforms to this ISI Specification.

This conforming or non-conforming to specification would not do away with the necessity of finding whether the product is "strip" contemplated in the tariff item. As to appellants' description of the product in invoices as strip, it is sufficient to say from the order of the Asstt. Collector of Central Excise, the description in the invoice (which is extracted in the beginning of this order) was both wires and strips. Such a vague description could not be used to fasten liability for duty on a party. Apart from this also note and it is not disputed by the department the description the product in the trade is not uniform. Other manufacturers like Special Steel Ltd. described the product as wire. In fact it has been urged by the appellants and not disputed by the other party that in the case of Special Steel Ltd. Flat armouring wire for cables manufactured by the Company has not been considered as steet strips.

8. For the purpose of this appeal, it is not necessary to consider whether the appellants' product in order to be classified as strip should be the product of a strip mill and what is the effect of the decision of the Tribunal in M/s Tigrania Metal & Steel Industries' case in the present appeal The appellants' product undisputedly is not hot or cold rolled product and nor is it rectangular in cross-section nor does it have trimmed or sheared edges. Thus the essential attributes to classify the product as strip under T.I. 26AA at the material time are lacking in the case. It has not been suggested by any of the parties that if classification of the product as strip fails, it would classify elsewhere, other than wire under T.I. 26AA(ia). The appellants' claim therefore for classification of their product under T.I. 26AA(ia) would have to be accepted.

9. As a result of the aforesaid discussion, the appellants' product is held classifiable under T.I. 26AA(ia) and not as strip under sub-item (iii) as held by the lower authorities. The appeal is thus allowed in the light of for foregoing observations with consenquential relief to the appellants.

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