1997 (2) TMI 128 - SC - Central Excise

Whether copper rods and bars manufactured by the appellant could properly be classified under Item 26A of the Central Excise Tariff and not under Item 68 thereof? Held that - Tariff Item 26A(1) refers to a product in any crude form including ingots, bars, blocks, slabs, billets, shots and pellets. Under the ISI Standard bar/rod has been described as any extruded, drawn, cold or hot rolled, forged, cast or combination of any of these processes of solid section supplied in straight length, whose width or distance between parallel faces is greater by 6 mm and the sub-entries following the same show that they can be in different shapes. Therefore, the term bar in Entry 26A(1) would also include a rod. Thus the authorities below were wrong in classifying the goods as falling within Tariff Item 68 and not under Item 26A(1). Appeal allowed. So far as the question of refund is concerned, it will have to be determined in accordance with the decision of the Constitution Bench of this Court in Mafatlal s case 1996 (12) TMI 50 - SUPREME COURT OF INDIA .

Summary

Issues:
Classification of copper rods and bars under Central Excise Tariff - Item 26A vs. Item 68
Refund claim for excise duty paid under incorrect classification

Analysis:
The case involved a dispute regarding the classification of copper rods and bars manufactured by the appellant under the Central Excise Tariff. The Government of India initially classified the products under Item 26A but later, the Assistant Collector of Central Excise reclassified them under Item 68, resulting in the appellant claiming a refund for the duty paid under the incorrect classification of Item 68. The Tribunal upheld the classification under Item 68, prompting the appellant to file an appeal challenging the decision (Appeal No. 1322/88).

The history of the classification issue dates back to communications from the Deputy Superintendent of Central Excise advising the appellant to obtain a license under Tariff Item 26A, which was later changed to Item 68. Despite a High Court decision supporting classification under Item 26A(1), the authorities continued to classify the products under Item 68. The appellant sought a refund based on the correct classification under Item 26A(1) and appealed the decision through C.A. No. 4084/86 for the period from December 1978 to April 1979.

The Supreme Court analyzed the definitions of hollow rods and bars based on industry standards and commercial parlance. It concluded that the appellant's products, known as hollow rods in the market, fell under Tariff Item 26A(1) as they met the criteria specified under that classification. The Court held that the authorities erred in classifying the goods under Item 68 instead of Item 26A(1) and allowed both appeals, overturning the decisions of the lower authorities.

Regarding the refund claim, the Court referred to the decision in Mafatlal's case and directed the matter to be decided by the Assistant Collector of Central Excise in accordance with the guidelines provided. The Court disposed of both appeals without any order as to costs, emphasizing the correct classification under Tariff Item 26A(1) for the appellant's products.