2012 (3) TMI 326 - HC - Central Excise

Classification - poultry keeping equipment - poultry cages, welded wire mesh for poultry industry etc. - parts of Rearing and Laying Units or Batteries viz top, bottom and partition made from G.I. wire - held that - there can be no doubt that the Wire mesh manufactured by the petitioner even if sold to a poultry farmer for assembling of cages for poultry or battery of such cages cannot qualify as machinery under heading 84.36 and would be an article of iron and steel wire within the meaning of heading 7314.

Issues Involved:
1. Impugned Trade Notice and recovery of Excise duty.
2. Classification of poultry equipment under Central Excise Tariff.
3. Alleged discrimination in classification by different Excise Authorities.
4. Maintainability of the writ petition due to availability of alternative remedy.
5. Territorial jurisdiction of the Delhi High Court.

Issue-wise Detailed Analysis:

1. Impugned Trade Notice and Recovery of Excise Duty:
The petitioner challenged the Trade Notice dated 19th November 1990, issued by the Collector of Central Excise, Bangalore, which clarified that heading 84.36 covers only 'Poultry Keeping Machinery' and not equipment without mechanical functions. The petitioner sought to restrain the respondents from recovering Excise duty based on this notice.

2. Classification of Poultry Equipment under Central Excise Tariff:
The petitioner, a manufacturer of poultry equipment, claimed exemption from Excise duty under heading 84.36 for parts of rearing and laying units made from G.I. wire. The Asstt. Collector of Central Excise, Bangalore, refuted this, classifying the goods under heading 7314. The court found that wire mesh partitions, even if sold to poultry farmers, do not qualify as 'machinery' under heading 84.36 but are articles of iron and steel wire under heading 7314.

3. Alleged Discrimination in Classification by Different Excise Authorities:
The petitioner argued that while Excise Authorities in Bangalore classified their goods under heading 7314, authorities in Ahmedabad and Maharashtra treated the same goods as exempt under heading 84.36, leading to discrimination. The court did not find merit in this contention, emphasizing the specific use and nature of the goods in question.

4. Maintainability of the Writ Petition Due to Availability of Alternative Remedy:
The respondents contested the writ petition's maintainability, citing the availability of an appeal to the CESTAT. The petitioner cited various judgments to argue that writ petitions against Trade Notices are maintainable. The court, acknowledging the long pendency of the case, chose to adjudicate on merits but noted that alternative remedies should generally be exhausted.

5. Territorial Jurisdiction of the Delhi High Court:
The court questioned its territorial jurisdiction since the cause of action and the impugned Trade Notice originated in Bangalore. Despite this, the court proceeded to adjudicate the matter on merits due to the prolonged pendency of the case.

Judgment Analysis:
The court examined the classification issue in detail, referencing the CESTAT Bangalore's decision in a similar case (Commissioner of Central Excise v. Weld Fuse Pvt. Ltd.), which had granted exemption under heading 84.36. However, the court distinguished the present case, noting the petitioner's admission that the wire mesh partitions could be used for purposes other than poultry cages. The court emphasized that heading 84.36 pertains to 'machinery,' which involves mechanical functions, and mere equipment or structures do not qualify.

The court referenced various legal definitions and precedents to conclude that the wire mesh partitions do not meet the criteria for 'machinery' under heading 84.36. Consequently, the goods were classified under heading 7314 as articles of iron and steel wire.

Conclusion:
The writ petition was dismissed on merits, with the court finding no basis for the claimed exemption under heading 84.36. The court also noted the lack of territorial jurisdiction and the availability of an alternative remedy but chose to address the merits due to the case's long history. No order as to costs was made.

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