2013 (3) TMI 501 - AT - Central Excise

SSI exemption under Notification No. 9/2000-C.E., dated 1-3-2000 as amended by Notification No. 9/2001-C.E., dated 1-3-2001 denied - as per the department some of assessee s final products were Brass Pellets and Brass Granules falling under sub-heading 7403.21 which were excluded from the purview of SSI exemption - demand of duty - Held that - Heading 7403.21 covers - Copper Zinc Base Alloys (Brass). There is also another heading in Chapter 74 - Heading 7406, which covers the Brass Powder or flakes but the since goods, in question, are not in form of Brass Powder or flakes, the classification under this sub-heading is ruled out. Thus the Brass Brazing Granules/Pellets would be correctly classifiable under sub-heading 7403.21 as the goods, in question, are in the nature of unwrought metal and this sub-heading covers that Copper Zinc Base Alloys . It would not be correct to classify these Brass Granules/Pellets as articles of Brass as the articles are something which are made by working on the Metal while the goods, in question, are in the nature of unwrought metal. Since the goods are correctly classifiable under sub-heading 7403.21 and since the same are other than the Brass Rods/Bars used for making wire, the same would not be covered by SSI exemption - against assessee.

Summary

Issues:
Classification of Brass Brazing Granules/Pellets under sub-heading 7403.21 or sub-heading 7419.99 for eligibility of SSI exemption.

Detailed Analysis:
1. The respondent, manufacturers of Copper Alloys, Brass, Zinc Pellets, and Copper Wire, availed SSI exemption for their final products under specific notifications. The department issued a show cause notice denying SSI exemption for Brass Pellets and Granules falling under sub-heading 7403.21, leading to a demand for allegedly short-paid duty.

2. The Additional Commissioner confirmed the duty demand, interest, and imposed a penalty, which was later set aside by the Commissioner (Appeals) who classified Brass Granules and Pellets under sub-heading 7419.99 as articles of Brass, making them eligible for SSI exemption. The Revenue appealed against this decision.

3. The Departmental Representative argued that Brass Granules and Pellets are un-wrought copper alloys classifiable under sub-heading 7403.21, not as articles of Brass under sub-heading 7419.99, thus making them ineligible for SSI exemption.

4. The respondent's Counsel defended the Commissioner (Appeals) decision, stating that Brass Brazing Granules/Pellets are ready-to-use articles classified under sub-heading 7419.99, justifying the SSI exemption eligibility.

5. The Tribunal considered the submissions and records, focusing on the classification of Brass Brazing Granules/Pellets. The items are made by pouring molten brass into water and used for welding/brazing applications.

6. Heading 7403.21 encompasses "Copper Zinc Base Alloys" (Brass), while the respondent argued for classification under sub-heading 7419.99 as articles of Brass. However, the Tribunal ruled in favor of the department, classifying the items under sub-heading 7403.21 as unwrought metal, ineligible for SSI exemption, and allowing the Revenue's appeal.

This detailed analysis of the judgment highlights the dispute over the classification of Brass Brazing Granules/Pellets under specific sub-headings for determining eligibility for SSI exemption, ultimately leading to the Tribunal's decision in favor of the Revenue's appeal.