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Rayalaseema Cable Corpn. Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1983)(14)ELT2358TriDel
AppellantRayalaseema Cable Corpn.
RespondentCollector of Central Excise
Excerpt:
.....tariff.2. the appellants are manufacturers of aa/acsr conductors. for the purpose, they draw bare aluminium wire measuring less than 10 swg from out of duty paid aluminium rods. a few strands of the wires so obtained re-twisted for the purpose of making conductors. the appellants were not paying duty on bare aluminium wires of less than 10 swg made from out of duty paid aluminium rods captively consumed. the central excise authorities felt that the wires so obtained were liable to pay excise duty. they therefore, issued notice to them to show cause why for the period 1-9-1980 to 31-12-1980, they should not be called upon to pay a sum of rs. 1,13,803.12. another show cause notice for the period 1-1-1981 to 30-5-1981 demanding rs. 98,679.78 was also issued to the appellants. the.....
Judgment:
1. In this Revision Application transferred to the Tribunal, to be disposed of as an appeal, the question for decision is classification of 'Bare Aluminium Wires' measuring 10 SWG or less under the Central Excise Tariff whether they should be classified under Tariff Item 33B (II) or Tariff Item No. 68 of Central Excise Tariff.

2. The appellants are manufacturers of AA/ACSR conductors. For the purpose, they draw bare aluminium wire measuring less than 10 SWG from out of duty paid aluminium rods. A few strands of the wires so obtained re-twisted for the purpose of making conductors. The appellants were not paying duty on bare aluminium wires of less than 10 SWG made from out of duty paid aluminium rods captively consumed. The Central Excise authorities felt that the wires so obtained were liable to pay Excise duty. They therefore, issued notice to them to Show Cause why for the period 1-9-1980 to 31-12-1980, they should not be called upon to pay a sum of Rs. 1,13,803.12. Another Show Cause Notice for the period 1-1-1981 to 30-5-1981 demanding Rs. 98,679.78 was also issued to the appellants. The appellants replied to the show cause notice contending that bare aluminium wires made from out of duty paid aluminium rods do not attract Central Excise duty. They requested for dropping the proceedings. The appellants did not request for personal hearing. The Asstt. Collector of Central Excise, Anantpur, by two orders bearing dated 25-8-1981, number 130/81 & 131/81 confirmed the demand. Two appeals filed to the Appellate Collector of Central Excise, Madras were rejected by the Appellate Collector by his order dated 22-5-1982. He held that redrawn wires from aluminium rods fall under T.I. 33B(II) and that in the absence of any exemption Notification, the appellants were liable to pay duty even though the wires so drawn may have been captively consumed. Aggrieved, the appellants filed Revision applications, which are now appeals before us.

3. At the hearing of the appeals, Shri K.R. Mehta, Consultant for the appellants submitted that the classification of bare aluminium wire finer than 10 SWG has been in confusion for quite some time. He invited our attention to Central Board of Revenue Circular No. 65/63, under which such wires were decided to be placed under item 33B, Tariff Advice No. 41/77, dated 30-11-1977 under which such wires would fall under T.I. 33B. Notification No. 90/82-C.E., dated 28-2-1982, under which wires would fall under T.I. 33B and would be exempt from the whole of duty of Excise. This Notification was rescinded by Notification No. 136/83-C.E., dated 30-4-1983. Notification No.137/83-C.E., dated 30-4-1983, while exempting bare aluminium wires finer than 3.25 mm (10 SWG) described such wires as falling under T.I.No. 68 of C.E.T. He also invited our attention to Tariff Advice No.7/83, dated 30-4-83, in which C.B.E. & C. inter alia have explained that bare aluminium wires of 3.25 mm (10 SWG) cannot be classified as Electrical Wires and cables under item No. 33B but such wires are correctly classifiable under T.I. 68 of the C.E.T.Shri Mehta, learned Consultant for the appellant further submitted that T. A. dated 30-4-1983 would be applicable in the case of appellants when their proceedings are still alive. He further submitted that the appellants' aluminium wires which are under 10 SWG should in view of this Tariff Advice be classified under T.I. 68 of C.E.T. so that they could get necessary exemption as applicable at the material time.

4. On behalf of the respondent Collector, Sh. Lakshmi Kumaran SDR contended that the orders passed by the lower authorities are correct but when confronted with the Tariff Advice of the C.B.E. & C. only said that the same would not be binding on the Tribunal.

5. We have carefully considered the matter. Even though Tariff Advice may not be binding on the Tribunal, it would certainly be binding on the respondent and the Department. It appears to us that bare aluminium wire of 10 SWG and less cannot be called Electric Wires and Cables so as to fall within T.I. 33B of C.E.T.-Electric Wires and Cables. This view also finds support from the T.A. of the C.B.E. & C. There being no other specific Tariff Item to cover this product, the same would be classifiable under T.I. 68 of the C.E.T. and should get whatever exemptions which are available legally, as a result of such classification. Parties agreed that if the appellants' product bare aluminium wires of less than 10 SWG in respect of which the present demands arise are classified under T.I. 68 of the C.E.T., the demands made from the appellants by the Central Excise authorities would have to be set aside.

We have said that aluminium wire in question would be correctly classifiable under Tariff Item 68 of C.E.T. In view of the foregoing the demands would have to be set aside. As a result, we set aside the demands made from the appellants and allow the appeal.


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