1980 (4) TMI 129 - CGOVT - Central Excise

Summary

Issues: Classification of aluminium rods in coil form under Tariff Item 27(a)(ii); Allegation of offence for clearing products without payment of duty; Request for set-off of duty paid on aluminium scrap and reasonable melting loss.

Classification Issue:
The main issue in this judgment is the classification of aluminium rods in coil form under Tariff Item 27(a)(ii). The petitioners argued that the product should not be classified as wire rods but as aluminium rods covered by IS:5047 (Part I) 1969 para 2.2.16. They contended that since there was no separate IS Specification for aluminium wire rods, the classification as wire rods was incorrect. However, the Government observed that there was no distinction between rods and wire rods in the tariff description, and one of the petitioners' customers had sent aluminium costed bars for conversion into wire rods, indicating industry recognition of the product as wire rods. The Government upheld the classification of the products as wire rods under Tariff Item 27(a)(ii) based on these considerations.

Allegation of Offence:
Another issue raised was the allegation of an offence against the petitioners for clearing the products without payment of duty and not following Central Excise formalities. The petitioners argued that initially, the department had accepted their contention that the products were not dutiable under Tariff Item 27, and the classification lists filed by them were approved. Subsequently, the classification was reversed by the department. The Government agreed that the petitioners had not suppressed any material information and set aside the redemption fine and penalty imposed, stating that the petitioners cannot be penalized for the department's wrong approval of the classification list.

Request for Set-Off:
The petitioners also requested a modification of the duty demand by providing a set-off for the duty paid on the aluminium scrap and considering a reasonable melting loss. The Government noted that this point was raised for the first time at the revision application stage and was not brought up earlier. They refrained from addressing this aspect at that stage, suggesting that the petitioners could raise this point before the Assistant Collector with specific reference to any notification entitling them to a set-off. The Government disposed of the revision applications accordingly, without further consideration of the set-off request at that stage.