1989 (10) TMI 133 - AT - Central Excise

Issues Involved:
1. Liability of imported asbestos raw to excise duty and additional customs duty (C.V. duty).
2. Classification of asbestos raw under Tariff Item 22F of the Central Excise Tariff (CET).
3. Distinction between asbestos raw and asbestos fibre in commercial and legal terms.
4. Applicability of previous judicial decisions to the current case.

Detailed Analysis:

1. Liability of Imported Asbestos Raw to Excise Duty and Additional Customs Duty (C.V. Duty):
The appellants are manufacturers of asbestos cement products and imported asbestos raw, which they argue is not a manufactured product but a product of mining, thus not subject to excise duty or C.V. duty. This matter is pending before the Supreme Court. The appellants had their refund claim for the additional duty levied on four consignments of asbestos raw rejected by the Assistant Collector and the Collector of Customs (Appeals). The appellants did not press this point further in the appeal, focusing instead on another contention.

2. Classification of Asbestos Raw Under Tariff Item 22F of the Central Excise Tariff (CET):
The core issue was whether the imported material could be termed as "asbestos fibre" and thus be excisable under Tariff Item 22F of the CET at the relevant time (January 1985). The bills of entry described the material as "asbestos raw" of different grades. The appellant presented a glossary of terms from the Indian Standards Institution, defining various forms of asbestos, including crude asbestos and milled asbestos, distinguishing them from asbestos fibre. The CCCN classification also differentiated between crude asbestos and processed asbestos fibres.

3. Distinction Between Asbestos Raw and Asbestos Fibre in Commercial and Legal Terms:
The appellant argued that asbestos raw is different from asbestos fibre and yarn as per ISI specifications and commercial parlance. They highlighted that the import of asbestos raw is canalized through public sector agencies like MMTC and is distinct from asbestos fibre. The appellant contended that the Indian excise tariff structure, based on CCCN, does not include asbestos raw under T.I. 22F. The Department's contention that the issue was covered in favor of the Revenue by previous cases was refuted by the appellant, emphasizing the technical and commercial distinction between asbestos raw and asbestos fibre.

4. Applicability of Previous Judicial Decisions to the Current Case:
The Tribunal reviewed several cases cited by the Revenue:
- Hyderabad Asbestos Cement Products Ltd. & Another: The High Court decision did not address whether T.I. 22F covered asbestos raw. The case focused on whether the process of obtaining asbestos fibre was part of mining and amounted to manufacture.
- Collector of Central Excise, Jaipur v. Shree Pratap Commercial Co. Pvt. Ltd.: The issue was whether the process of pulverizing asbestos ore amounted to manufacture, not the dutiability of asbestos raw.
- Collector of Central Excise, Bangalore v. Hindustan Mineral Traders and Another: This case also dealt with the manufacturing process, not the classification of asbestos raw.

The Tribunal concluded that asbestos raw is not covered by T.I. 22F, as the technical literature and commercial practices distinguish it from asbestos fibre. The Collector's assumption that crude asbestos is also asbestos fibre was deemed incorrect. The Tribunal noted that if the goods do not fall under T.I. 22F, they might be classified under T.I. 68, the residuary entry, but refrained from expressing a final opinion as neither side argued this point.

Final Order:
The appeal was allowed, and the impugned order was set aside, granting consequential relief to the appellants.

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