1996 (9) TMI 278 - AT - Central Excise

Summary

Issues: Classification of goods under Central Excise Tariff - Whether corrugated steel sheets are classifiable under T.I. 25 or T.I. 68 of the Central Excise Tariff Act, 1985.

In the judgment delivered by the Appellate Tribunal CEGAT, New Delhi, the issues revolved around the classification of goods under the Central Excise Tariff Act, 1985. The appellants, engaged in manufacturing asbestos cement product machinery, contended that corrugated steel sheets used in their manufacturing process should be classified under T.I. 25, while the Department argued for classification under T.I. 68 and sub-heading 8474.00. The dispute arose due to the transformation of the steel sheets into templates for the production of asbestos cement sheets. The appellants claimed a refund based on the change in tariff description post-Budget 1985.

The appellants argued that the corrugated steel sheets were merely templates used in the manufacturing process and did not undergo significant changes to be classified differently. They relied on legal precedents emphasizing that excise duty is chargeable only when a new and distinct article emerges. The Department contended that the templates had acquired specific shape, character, and use, making them distinct manufactured goods. They argued that the process of converting hot rolled steel sheets into templates constituted manufacturing.

The Tribunal analyzed the nature of the product, noting that the templates were not plain or corrugated steel sheets but had specific shapes and contours resembling moulds. They found that the templates no longer qualified as plain sheets after being shaped differently. The Tribunal rejected the appellants' arguments based on common parlance usage and upheld the classification under T.I. 68 of the Central Excise Tariff Act. It was concluded that the conversion of hot rolled steel sheets into templates constituted a manufacturing process, leading to classification under sub-heading 8474.00 from 1-3-1986.

In the final decision, the Tribunal upheld the lower authorities' findings and rejected the appeals, affirming the classification of the goods under T.I. 68 and sub-heading 8474.00. The judgment clarified that templates, due to their specific characteristics and manufacturing process, could not be classified under T.I. 25 and were correctly classified under the designated sub-heading, emphasizing the importance of the product's distinct shape, character, and use in determining classification under the Central Excise Tariff Act.