1981 (5) TMI 24 - CGOVT - Central Excise

Summary

Issues:
1. Classification of imported goods under Central Excise Tariff.
2. Application of countervailing duty on imported goods.
3. Interpretation of classification rules under Central Excise Tariff and Customs Tariff Act.

Detailed Analysis:
1. The petitioners imported "Aluminium Alloy Connecting Rod Die Forgings" classified under heading 84.06 of the Customs Tariff Act, 1975 without countervailing duty. Later, demands for countervailing duty under Item 27(b) of the Central Excise Tariff were confirmed. The petitioners contested the levy of countervailing duty, arguing that the forgings, classified as finished products under CTA '75, could not be classified as Aluminium Forgings under Item 27(b) of Central Excise Tariff.

2. The Government considered the submissions and focused on whether the impugned items fell under Item 27(b) of CET despite being classified as parts of ICP engines under CTA '75. It was clarified that the principles of classification under CTA '75 did not directly apply to the Central Excise Tariff. The impugned items, being aluminium forgings subjected to various operations to manufacture the finished product, were deemed semi-finished parts falling under the description covered by Item 27(b) of CET, thus attracting countervailing duty.

3. The Government addressed the petitioners' argument that classifying an item as semi-finished under CET while considering it a finished part for basic customs classification was incongruous. It was explained that the impugned item was classified as a finished part under CTA '75 due to interpretative rules, which did not apply to classification under CET. Therefore, there was no inconsistency in classifying the item as semi-finished under CET. The appellate orders upholding the countervailing duty were deemed correct in law, and the revision applications were rejected, with the recovery proceedings for the impugned cases reinstated.