2015 (10) TMI 37 - AT - Central Excise

Classification of goods - shapes and sections of non-alloy steel - Classification under Heading 7308.90 or under Chapter 7216.90 - Held that - Board has only clarified that 7308 explicitly covers plates, rods, angles, shapes and sections, tubes and the like, prepared for use in structurals of iron and steel. As stated earlier, the impugned goods were not prepared for use in structurals. Although Board s clarification is not binding on quasi judicial authorities for deciding classification, it is referred to here to indicate that even the said Board s circular does not support the contention of Revenue. Indeed the issue is fully covered by the judgement of CESTAT in the case of CCE v. Tube Investment of India Ltd. (1993 (11) TMI 134 - CEGAT, NEW DELHI) - Decided against Revenue.

Summary

Issues: Classification of non-alloy steel products under Heading 7308.90 or Chapter 7216.20

Classification under Heading 7308.90:
The appeals were filed by Revenue against the Order-in-Original classifying non-alloy steel products under Heading 7308.90, leading to a demand of &8377; 32,35,784/- and &8377; 22,54,699/- against two companies. The Commissioner (Appeals) set aside the Order-in-Original and classified the goods under Heading 7216.20. Revenue contended that as per Board's Circular No. 46/90, the goods should be classified under sub-heading 7308.90, citing a Tribunal's order that did not consider the Board's circular.

Classification under Chapter 7216.20:
The respondents argued that the products, shapes, and sections of non-alloy steel, fall under Chapter 72 as they are not further worked and are manufactured by cold rolling. They claimed that Heading 73.08 covers parts of structures of iron and steel, including shapes and sections, prepared for use in structures. The Tribunal found that the goods, obtained by cold rolling and not further worked, do not qualify as being prepared for use in structures, thus falling under Chapter 72.16 instead of Chapter 73.08.

Analysis of Board's Circular and Legal Precedents:
The Board's circular clarified that cold roll formed sections prepared for use in structurals are classifiable under sub-heading 7308.90. However, the Tribunal noted that the goods in question were not "prepared for use" in structurals, aligning with the judgment of CESTAT in a previous case. The Tribunal emphasized that the Board's circular is not binding on quasi-judicial authorities and does not support Revenue's contention. The Tribunal referenced legal precedents, including the judgment in the case of CCE v. Tube Investment of India Ltd., which supported the classification under Heading 72.16. The Tribunal highlighted that the said judgment had not been overturned by any higher authority and that not considering the Board's circular did not affect the validity of the quasi-judicial order.

Conclusion:
After considering the arguments and legal aspects, the Tribunal found Revenue's appeals lacking merit and dismissed them. The judgment emphasized the importance of factual analysis and legal precedents in determining the correct classification of goods under the relevant tariff headings, ultimately upholding the classification under Chapter 72.16 for the non-alloy steel products in question.