1979 (10) TMI 96 - HC - Central Excise

Summary

Issues:
1. Whether the items manufactured by the petitioner are liable to excise duty under Tariff Item No. 40.
2. Whether the Assistant Collector's classification of the items as excisable goods was correct.
3. Whether the Notification dated July 9, 1968, supports the conclusion of the Assistant Collector.
4. Whether the items in question can be considered as articles of furniture.
5. Whether the petitioners are entitled to the relief claimed.

Detailed Analysis:
1. The petitioner, a proprietor of a manufacturing firm, was manufacturing various items like Metal Tube Trolley, Mini Trolley, Trolley Structure, Gas Trolley, Storage Bins, Stainless Steel Pump Stands, and Box with door. The issue arose when the Central Excise Authorities alleged that these items were excisable under Tariff Item No. 40 and required the petitioner to obtain the necessary license. The petitioner contested this claim, arguing that the items were not liable to excise duty under Tariff Item No. 40.

2. The Assistant Collector, in his order, classified the items as excisable based on a notification from July 9, 1968. The petitioner challenged this classification, contending that the items did not fall under the category of steel furniture as required by Tariff Item No. 40. The Assistant Collector's decision was upheld by the Appellate Authority, leading to the petitioner filing a petition under Article 226 of the Constitution of India to challenge the orders.

3. The petitioner's counsel argued that the notification from July 9, 1968, supported the petitioner's claim rather than the Assistant Collector's decision. The notification listed items of steel furniture liable for duty but was not exhaustive. The counsel highlighted that the listed items were household articles or furniture used in clinics, indicating that the Department understood Tariff Item No. 40 to cover articles of steel that could be described as furniture.

4. The High Court analyzed the nature of the items in question, such as Trolleys, Storage Bins, Stainless Steel Pump Stands, and Box with door. It was observed that these items were not typical household furniture but were used in factories for specific purposes like shifting goods. The court emphasized that for an article to be considered furniture, it should provide comfort or convenience to a human being in a house or office. The court agreed with the petitioner that the Assistant Collector's classification based on nomenclature alone was erroneous.

5. Ultimately, the High Court ruled in favor of the petitioner, finding that the items manufactured did not qualify as articles of furniture under Tariff Item No. 40. The court held that the Assistant Collector's decision was incorrect, and the petitioner was entitled to the relief sought in the petition. The court made the rule absolute in favor of the petitioner, with no order as to costs.