2011 (4) TMI 671 - AT - Central Excise

Classification of the product - demand of duty - penalty - product claimed to be classifiable under chapter heading 7308.90 by the appellants - adjudicating authority by its order rejected the contention and confirmed the classification under chapter heading 7306.90 - product manufactured by the appellants is taper steel tube - The description of the structure as found in relation to entry 7308 specifically refers to erection of a structure, plates and shape tubes and alike. Merely because two or more poles are used for holding wires that itself would not amount to forming a structure - Held that - in view of the decision of the Apex Court in Indian Metals & Ferro Alloys Ltd. (1990 -TMI - 42814 - SUPREME COURT OF INDIA) and the decision of the Tribunal in CGM, BSNL vs. CCE, Bhopal (2009 -TMI - 76813 - CESTAT, NEW DELHI), the issue stands concluded as rightly held by the authorities below and, therefore, the impugned order does not warrant any interference.

Summary

Issues:
Classification of product under chapter heading 7307.90 or 7308.90, confirmation of demand of duty, setting aside of penalty imposed by adjudicating authority.

Analysis:
The appellants, engaged in manufacturing taper steel tubes for telephone poles, contested the classification of their product under chapter heading 7307.90 by the department, claiming it should be classified under chapter heading 7308.90. The adjudicating authority confirmed the classification under 7306.90, demanded duty of Rs. 87,50,688, and imposed a penalty of Rs. 10 lakhs. The Commissioner (Appeals) dismissed the appeal against this order but set aside the penalty.

The appellants argued that consistent tribunal decisions supported their classification under 7308.90, citing Circulars and past cases. They emphasized that the product was not a structure as per the description under 7308, as it was used for telephone poles, not for structures like plates or rods. The department, however, referred to a recent case where the product was classified under 7306.90, asserting that the issue was settled.

The Tribunal analyzed the descriptions under chapter sub-headings 7306 and 7308, noting that the latter referred to structures and parts for use in structures, while the former related to tubes and hollow profiles of iron or steel. Considering the nature of the product as taper steel tubes for telephone poles, the Tribunal concluded that it did not constitute a structure as described under 7308. The Tribunal also dismissed the relevance of circulars and past decisions, emphasizing the settled law and the recent case supporting classification under 7306.90.

The Tribunal highlighted that the product's use for telephone poles did not qualify as forming a structure under 7308. It rejected the appellants' arguments based on circulars and past decisions, stating that the issue was settled by the recent case and established legal principles. The Tribunal upheld the lower authorities' decision on classification and duty demand, dismissing the appeal.

In conclusion, the Tribunal dismissed the appeal, stating that the issue was settled by previous decisions and legal principles, making further references unnecessary. The judgment affirmed the classification under chapter heading 7306.90 and the demand of duty, while setting aside the penalty imposed by the adjudicating authority.