1992 (12) TMI 124 - AT - Central Excise

Issues Involved:
1. Classification of Steel Tubular Poles under Tariff Sub-heading 7306.90 or 7308.90.
2. Applicability of the Supreme Court decision in Indian Metals and Ferro Alloys Ltd.
3. Time-barred nature of the demand.

Issue-wise Detailed Analysis:

1. Classification of Steel Tubular Poles:
The primary issue in these appeals is whether Steel Tubular Poles are classifiable under Tariff Sub-heading 7306.90 as claimed by the appellants or under Sub-heading 7308.90 as contended by the Department. The relevant tariff entries are as follows:
- 73.06: Other tubes, pipes, and hollow profiles of iron or steel.
- 7306.90: Other.
- 73.08: Structures and parts of structures of iron or steel.
- 7308.90: Other.

The appellants argued that the manufacturing process involves creating hollow pipes from duty-paid hot-rolled coils, which are welded and coated with bituminous paint, retaining their hollow profiles. These poles are primarily used for overhead power lines and do not lose their characteristics of being tubes, pipes, and hollow profiles. They contended that these poles are not structures and should not be classified under 7308.90. The Department, however, argued that the poles are manufactured as per IS 2713/1980 specifications and bear load, fitting the description under 7308.90.

2. Applicability of the Supreme Court Decision:
The appellants relied on the Supreme Court decision in Indian Metals and Ferro Alloys Ltd., which dealt with the classification of similar items under the old Tariff Item 26AA. The Supreme Court held that such poles should be classified as tubes and pipes, not as structures. The appellants argued that the principles laid down in this decision should apply to the current tariff classification, despite changes in the tariff structure. The Department contended that the new tariff, based on the Harmonised System Nomenclature, introduced detailed sub-headings and should not be decided based on the old tariff entries.

3. Time-barred Nature of the Demand:
The appellants also raised the issue of the demand being time-barred. They argued that the classification under 7306.90 was approved for a considerable time, and the show cause notice issued on 23-3-1990 for reclassification under 7326.90 (later corrected to 7308.90) was without valid reason. They contended that any change in classification should be enforceable only from the date of the notice, not retrospectively.

Judgment Analysis:
The Tribunal considered the arguments and evidence presented. It noted that the manufacturing process and the nature of the poles indicate they should be assessed as tubes and pipes. The Tribunal emphasized that there was no evidence showing the poles were prepared for use in structures as envisaged under Heading 73.08. The Tribunal also referenced the Supreme Court decision in Indian Metals and Ferro Alloys Ltd., which supported the classification of such poles under tubes and pipes. The Tribunal concluded that the steel tubular poles are not classifiable under 7308.90 but should be classified under 7306.90.

In light of this conclusion, the Tribunal found it unnecessary to address the issue of limitation. The appeals and cross-objections were disposed of accordingly, affirming the classification under 7306.90.

Conclusion:
The Tribunal ruled that Steel Tubular Poles are classifiable under Tariff Sub-heading 7306.90, not 7308.90, following the Supreme Court's precedent in Indian Metals and Ferro Alloys Ltd. The issue of the demand being time-barred was not addressed as the primary classification issue was resolved in favor of the appellants.

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