1986 (10) TMI 252 - AT - Central Excise

Summary

Issues: Classification of metallizing wires as welding electrodes under Tariff Item 50 CET.

In the case before the Appellate Tribunal CEGAT, New Delhi, the issue revolved around the classification of metallizing wires manufactured by a company as welding electrodes falling under Tariff Item 50 of the First Schedule to the Central Excises and Salt Act. The Assistant Collector had directed the company to show cause why the goods should not be classified as welding electrodes and why duty should not be demanded for the years 1973-74 to 1976-77. The company denied the classification, leading to an adjudication where the Assistant Collector rejected the company's case, imposed a penalty, and directed the company to obtain a license and submit a classification list. The Appellate Collector of Central Excise, Calcutta later set aside this order. Subsequently, the Central Government issued a notice under Section 36(2) of the Act, challenging the legality of the Appellate Collector's order, which was the subject of the appeal before the Tribunal.

The Tribunal considered the manufacturing process of the metallizing wires, where wire rods received by the company underwent further processes, including reduction of diameter and copper coating. The uncoated wire rods were used by another company for production of electrodes, while the coated wire rods were utilized for metallizing purposes. The Central Government's notice contended that the wires could be classified as welding electrodes based on their chemical composition and specific applications in welding processes. However, the Tribunal disagreed with this approach, citing a Bombay High Court judgment that emphasized the distinction between welding wires and welding electrodes based on the use of electricity in the welding process. The Tribunal noted that in the case at hand, the metallizing wires were used in a process where no electricity passed through the wire, aligning with the Bombay High Court's reasoning. Additionally, the Tribunal referred to a previous decision where submerged arc welding wires were held not classifiable as electrode wires under Tariff Item 50 CET. Therefore, the Tribunal concluded that the order of the Appellate Collector setting aside the classification under Tariff Item 50 CET did not require any interference.

As a result of the above analysis, the Tribunal dismissed the appeal and discharged the notice issued by the Central Government. The Tribunal's decision was based on the interpretation of the nature of the manufacturing process and the specific use of the metallizing wires, aligning with legal precedents and established principles regarding the classification of goods under the relevant tariff item. The Tribunal's judgment clarified the distinction between welding wires and welding electrodes, emphasizing the requirement of electricity usage for classification under Tariff Item 50 CET.