2004 (1) TMI 411 - AT - Central Excise

Classification of HDPE pipes under Central Excise Tariff Act - Dispute between SH 3917.00 and SH 8424.91 - Duty demand and penalty imposed by original authority - HELD THAT - The various sizes of HDPE pipes manufactured by the respondents were, undisputedly, of the pressures 2 kg, 2.5 kg and 3.2 kg which were specific for sprinkler irrigation systems as per IS specifications, whereas the standard pressures sold in market for general purposes were 4 kg., 6 kg. and 10 kg. vide para 3(i) of the impugned order. For the reasons stated by us, the goods in question can only be classified as parts of sprinkler irrigation system under Heading 84.24. In the case of Jyoti Plastic 1992 (10) TMI 175 - CEGAT, NEW DELHI by the DR, the plastic tubes/pipes were found to be articles of general use and classified under Heading 39.17. In Supreme Industries 1998 (6) TMI 242 - CEGAT, NEW DELHI , the dispute was whether certain pipe fittings manufactured by the assessee were classifiable under Heading 39.17 or under Heading 39.25. Neither case involved classification of irrigation equipment-specific plastic pipes or tubes. Both the cases cited by the DR are thus distinguishable from the instant case. On the other hand, in the cases cited by counsel, it was consistently held that plastic pipes manufactured for being used as parts of irrigation equipments/systems, and actually supplied as such parts, were only to be classified under Heading 84.24. The lower appellate authority has rightly followed one of these decisions. Its reliance on para (4) of the Board s circular referred to by the DR is also quite appropriate. In the result, we uphold the classification of the goods under SH 8424.91 and reject the department s appeal.

Summary

Issues: Classification of HDPE pipes under Central Excise Tariff Act - Dispute between SH 3917.00 and SH 8424.91 - Duty demand and penalty imposed by original authority - Appeal by Revenue.

Summary:
The case involved a dispute regarding the classification of HDPE pipes manufactured by the respondents under the Central Excise Tariff Act. The respondents claimed classification under sub-heading 8424.91 as part of a Sprinkler Irrigation System, while the department insisted on the earlier classification under SH 3917.00. The original authority imposed duty and penalty, which was later set aside by the first appellate authority, classifying the goods under SH 8424.91. The Revenue appealed this decision.

The appellant argued that the plastic pipes/tubes manufactured by the respondents were goods of general use and should be classified under Heading 39.17, relying on relevant circulars and previous tribunal decisions. The counsel for the respondents cited tribunal decisions where similar goods were classified under Heading 84.24, specific to irrigation equipment.

The Commissioner (Appeals) found that the HDPE pipes were of IS specification for sprinkler irrigation system, supplied only as part of such systems, and not sold otherwise. The sizes of the pipes manufactured were within the standard range for sprinkler irrigation systems, as per IS specifications. The pressure specifications for the pipes used in sprinkler irrigation systems differed from those sold in the market for general purposes.

The Tribunal upheld the classification of the goods under SH 8424.91, rejecting the department's appeal. It emphasized that the goods in question, being specific to sprinkler irrigation systems, should be classified as parts of such systems under Heading 84.24, distinguishing them from articles of general use classified under Heading 39.17 in previous cases. The decision was based on established facts and appropriate legal interpretations, leading to the dismissal of the Revenue's appeal.