2008 (10) TMI 179 - AT - Central Excise

Aluminium Casseroles - what is manufactured is not a conventional casserole - impugned product is with the lid, is used in Railways, Air-crafts, etc. for providing packaged food - Aluminium Casseroles manufactured by them cannot be considered as container but have to be considered as trays and therefore are classifiable as articles for table use - product not classifiable u/h 76.12 as container but classifiable u/h 76.15 - it has to be accepted that the recommendations of Harmonised System Committee being of a great persuasive value and have to be considered for the purpose of determination of classification

Issues Involved:
1. Classification of "Aluminium Casseroles"
2. Applicability of CENVAT Credit Rules
3. Persuasiveness of Harmonised System Committee's opinion
4. Relevance of foreign judgments
5. Limitation period and penalty applicability

Issue-wise Detailed Analysis:

1. Classification of "Aluminium Casseroles":
The primary issue was whether "Aluminium Casseroles" should be classified under Chapter Sub-heading 7615.10 (later 7615 19 40) as tableware or as containers under Heading 76.12. The appellant argued that these items are trays for table use, citing HSN Explanatory notes and previous classifications under 7615.10. They emphasized that the items are similar to those described under Headings 73.23 and 73.24, which include articles for table use. The Harmonised Systems Committee had also classified similar items under 7615.19, supporting the appellant's view.

2. Applicability of CENVAT Credit Rules:
The appellant had availed CENVAT credit on common inputs for both excisable and exempted goods, paying amounts as required under Rule 6(3)(b) of CENVAT Credit Rules. This was not a central issue in the judgment but was part of the appellant's compliance history.

3. Persuasiveness of Harmonised System Committee's opinion:
The appellant cited the Harmonised Systems Committee's classification opinion, which supported their claim. The Committee classified similar items as tableware under 7615.19, and this opinion was considered to have great persuasive value. The judgment acknowledged that since the Indian tariff is aligned with HSN, the Committee's recommendations should be considered.

4. Relevance of foreign judgments:
The appellant referred to a judgment by the Supreme Court of South Africa, which classified similar items as tableware. The Indian tribunal found this judgment relevant and persuasive, noting that foreign judgments can be considered when the basis is the same.

5. Limitation period and penalty applicability:
The show cause notice was issued on 1-5-2007 for the period from April 2003 to June 2007. The appellant argued that they had disclosed their manufacturing process and classification, and thus the extended period for demand could not be invoked. The tribunal agreed, noting that the department was informed of the manufacturing process, and there was a previous adjudication on a related issue. Therefore, the extended period could not be invoked, and no penalty was leviable.

Conclusion:
The tribunal concluded that the "Aluminium Casseroles" manufactured by the appellant were correctly classifiable under Heading 76.15 as tableware and not as containers under Heading 76.12. The appellant's compliance with CENVAT Credit Rules was noted but not central to the judgment. The Harmonised Systems Committee's opinion and the South African judgment were considered persuasive. The extended period for demand could not be invoked, and no penalty was applicable. The appeals were allowed with consequential relief.

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