2002 (10) TMI 163 - AT - Central Excise

Summary

Issues:
Classification of slag-wool and rock-wool under Central Excise Tariff, 1985; Applicability of Rule 3(a) and Rule 3(c) of the Rules for Interpretation of the Tariff; Limitation period for demand of duty; Personal penalty under Section 11AC; Confiscation of goods.

Classification Dispute:
The dispute revolves around the correct classification of slag-wool and rock-wool manufactured by the appellants. The Revenue classified the goods under sub-heading No. 6803.00, while the appellants argued for classification under heading 6807.00. The appellants claimed that their products, made using more than 25% by weight of blast furnace slag, should be classified under sub-heading 6807.10. The contention was supported by the re-structuring of Chapter 68 in 1997-98 Union Budget, withdrawing previous exemptions and bringing such goods under Heading 6807.10. The Board's circular and a decision by the Commissioner (Appeals) in a similar case were also cited in support of the classification under Heading 6807.10.

Rule Interpretation and Precedents:
The Tribunal examined Rule 3(a) and Rule 3(c) of the Interpretation Rules for the Tariff. Rule 3(a) states that the heading with the most specific description should be preferred, favoring the classification under sub-heading 6803.00 as the products were specifically mentioned there. The Tribunal also considered a similar case decided by the Bangalore Bench, which held that rock-wool should be classified under heading 6803.00. The Tribunal aligned its decision with the Bangalore Bench's ruling, emphasizing the specific mention of slag-wool and rock-wool under sub-heading 6803.00.

Limitation Period and Penalty:
Regarding the limitation period for the demand of duty, it was noted that the appellants had changed their classification from 6803.00 to 6807.10 without proper approval, leading to an open dispute on classification during the relevant period. Therefore, the limitation did not apply, and the demand of duty was upheld. However, the personal penalty under Section 11AC was set aside due to the genuine dispute and the appellants' actions in filing classification lists. The confiscation of goods was also set aside, allowing the appellants to redeem the goods on payment of a fine.

Conclusion:
The Tribunal upheld the demand of duty against the appellants for the classification of slag-wool and rock-wool under sub-heading 6803.00. The personal penalty and confiscation of goods were set aside based on the genuine dispute and procedural considerations. The decision was aligned with Rule 3(a) of the Interpretation Rules and previous precedents, emphasizing the specific mention of the products under sub-heading 6803.00.