2006 (1) TMI 326 - AT - Central Excise

Summary

Issues:
Classification of product 'silver palladium wire' under chapter sub-heading 7101.60 or 7101.90.

Analysis:
The appeals were filed by two companies against the Commissioner (Appeals) regarding the classification of 'silver palladium wire' containing 70% silver and 30% palladium. The main issue was whether the product should be classified under chapter sub-heading 7101.60 (as argued by the appellants) or 7101.90 (as argued by the revenue).

The appellants argued that since the product predominantly contains silver (70%), it should fall under 7101.60 as it includes "strips, wires, sheets, plates and foils of silver." They relied on Chapter Note No. 4, stating that any alloy containing a precious metal is treated as an alloy of precious metal if the precious metal constitutes at least 2% by weight of the alloy.

However, the Tribunal found this argument outlandish upon examining the tariff Heading and Chapter Heading 7101.60. The Department's authorized representative referred to past Tribunal decisions to support their stance. One decision highlighted that an alloy with more than 2% silver should be treated as an alloy of silver, while another decision concluded that a product with 70% silver and 30% palladium should be considered a product of platinum.

The appellants also pointed out the differences between the Customs Tariff Schedule and the Central Excise Tariff Schedule, emphasizing that decisions based on one schedule cannot be directly applied to the other. The Tribunal analyzed the Central Excise Tariff Chapter 71, notes, and schedule, noting that sub-heading 7101.00 falls under the category of 'precious metals,' specifically silver and silver alloy items. It was clarified that items other than silver and its alloys in other precious metals would not fall under sub-heading 7101.60 but under 7101.90 as 'others.'

Consequently, the Tribunal directed the appellants to deposit 50% of the total duty demanded, which could be adjusted against the amounts already paid. Failure to make the additional payments within six weeks would result in the dismissal of the appeals. Upon depositing the required amount, the pre-deposit of the remaining sum would be waived. The matter was scheduled for a compliance report on a specified date, and both applications were disposed of accordingly.