2012 (2) TMI 289 - SC - Central Excise

Classification of Slagwool and Rockwool under Chapter sub-heading No.6807.10 revenue contending it to be classified under sub- heading No.6803.00. - assessee submits that they are manufacturing Min wool using more than 25% of blast furnace slag by weight, right from 1993 - Held that - Sub-heading No.6807 is specific to the goods in which more than 25% by weight, red mud, press mud or blast furnace slag is used. The heading is based entirely on material used on composition of goods. A tariff heading, based on composition of goods, is also specific heading like a heading based on commercial nomenclature. Therefore, we are of the view that the goods in issue are appropriately classifiable under Sub-heading No.6807.10 of the tariff entry. See CCE, Raipur Vs. Punj Star Insulation Fibre Co (2004 - TMI - 48995 - CESTAT, Northern Bench, New Delhi), M/s.Rockwool (India) Pvt. Ltd. Vs. CCE, Hyderabad (2005 - TMI - 54236 - CESTAT, South Zonal Bench, Bangalore) Further, in a classification dispute, an entry which is beneficial to the assessee requires to be applied and the same has been done by the adjudicating authority, which has been confirmed by the Tribunal Decided in favor of assessee.

Summary

Issues:
Classification of goods under Chapter sub-heading No.6807.10 or sub-heading No.6803.00 of the Central Excise Tariff Act, 1985.

Analysis:
The appeal concerns the classification of goods, specifically Slagwool and Rockwool, under Chapter sub-heading No.6807.10 or sub-heading No.6803.00 of the Central Excise Tariff Act, 1985. The Tribunal initially accepted the assessee's classification under sub-heading No.6807.10, which attracts a lower duty rate of 8%, contrary to the revenue's contention for classification under sub-heading No.6803.00 with a duty rate of 18%. The assessee had filed a classification declaration claiming the goods should be classified under sub-heading No.6807.10. A show cause notice was issued by the adjudicating authority, followed by an appeal by the revenue before the Commissioner (Appeals), who ruled in favor of classification under sub-heading No.6803.00. The Tribunal then allowed the assessee's appeal, restoring the initial classification under sub-heading No.6807.10.

The key contention revolved around the interpretation of the relevant entries under Chapter 68 of the Act. Sub-heading No.6803.00 covers goods like Slagwool and Rockwool, while sub-heading No.6807.10 pertains to articles made of specific materials, including blast furnace slag. The introduction of sub-heading No.6807.10 post-1997 was crucial. The period of appeal being after June 9, 1998, was significant in determining the applicable classification. The Tribunal's decision was based on the specific nature of goods using blast furnace slag, as indicated in sub-heading No.6807.10, which warranted a lower duty rate.

The arguments presented by both parties highlighted the importance of specific entries and legislative intent. The senior counsel for the revenue emphasized applying specific entries for goods like Slagwool and Rockwool, as per the Circular issued by the Board. Conversely, the counsel for the assessee justified the Tribunal's decision based on the beneficial classification under sub-heading No.6807.10. The Court noted that the composition of goods, particularly the use of blast furnace slag, was pivotal in determining the appropriate classification.

Additionally, the Court referenced a Full Bench Tribunal judgment supporting classification under sub-heading No.6807.10 for similar goods, which had not been challenged further by the revenue. The non-binding nature of departmental circulars on judicial authorities or courts was underscored. Ultimately, the Court upheld the Tribunal's decision, stating that no error was committed warranting interference. Consequently, the appeal was dismissed, affirming the classification under sub-heading No.6807.10 with the lower duty rate.

In conclusion, the judgment clarifies the classification dispute regarding Slagwool and Rockwool, emphasizing the significance of specific entries, legislative amendments, and the composition of goods in determining the applicable duty rate under the Central Excise Tariff Act, 1985.