1987 (7) TMI 460 - AT - Central Excise

Summary

Issues: Classification of goods as strips or flattened wire rods for the purpose of central excise duty.

In this judgment delivered by the Appellate Tribunal CEGAT, New Delhi, the issue at hand was the classification of goods produced by M/s. Mitter Sain Industries as either strips or flattened wire rods for the imposition of central excise duty. The Additional Collector of Central Excise, Meerut, had classified the goods as strips, leading to a duty demand. The goods in question were flattened aluminum wire rods produced through a re-drawing process, with dimensions of 10.6 mm x 4.2 mm and 6.1 mm x 3.8 mm, cleared in October 1985. The duty amount was calculated based on this classification.

The learned Counsel for the producers argued that the flattened aluminum wire rods were not strips, emphasizing that their manufacturing process involved re-drawing wire rods bought from other suppliers, resulting in flattened wire rods with slightly convex sides, unlike the rectangular cross-section of strips. The Counsel highlighted the absence of strip mills or flat mills in their plant, asserting that their goods did not meet the definition of strips as per Indian Standards.

The department's Counsel, on the other hand, referred to the Indian Standard definition of sheets and strips, arguing that even if the goods were not cold-rolled, if they fit the definition of strips, duty would be applicable. The Additional Collector relied on an explanation from the Central Excise Tariff Act, 1985, defining aluminum strips as flat products with a rectangular section, to justify the classification of the goods as strips.

The Tribunal noted that the Additional Collector failed to consider the possibility of the goods being flattened wire rods, distinct from strips, as per the definition under Chapter 76 for Wrought Bars and Rods. The Tribunal concluded that the goods exceeded the thickness requirement to be classified as flattened wire rods, not strips, and set aside the Additional Collector's order, ruling in favor of the producers.

In conclusion, the judgment revolved around the proper classification of the goods as either strips or flattened wire rods for central excise duty purposes. The Tribunal found that the goods manufactured by M/s. Mitter Sain Industries met the criteria to be classified as flattened wire rods, rejecting the classification as strips by the Additional Collector. This decision highlights the importance of accurate classification based on the characteristics and manufacturing process of the goods to determine the applicable duty rates.