1996 (9) TMI 338 - AT - Central Excise

Summary

Issues: Classification of copper products as pipes and tubes or shells and blanks under the Central Excise Tariff.

The judgment pertains to an appeal filed by the Revenue concerning the classification of copper products by M/s. Star Metal & Tubes Corpn. The dispute revolves around whether the products should be classified as pipes and tubes of copper or as shells and blanks for pipes and tubes under the Central Excise Tariff. The Assistant Collector of Central Excise and the Collector of Central Excise (Appeals) both classified the products as pipes and tubes, allowing an exemption from excise duty. The Revenue contended that the goods did not meet the criteria specified in the tariff entry, arguing that the products were not directly used as pipes and tubes by purchasers but were further processed to become such. The matter was heard extensively, with the Revenue highlighting the lack of specific evidence regarding the conversion of products into pipes and tubes by purchasers. However, the Assistant Collector and the Collector of Central Excise (Appeals) had already determined the classification based on expert reports and ISI specifications, finding the products to be pipes and tubes of copper within the tariff definition.

The Tribunal analyzed the classification under Item No. 26A of the Central Excise Tariff, which distinguishes between pipes and tubes of copper (sub-item No. 9) and shells and blanks for pipes and tubes (sub-item No. 10). Both categories attract the same ad valorem value rate. The definition of shells and blanks includes hollow products produced by extrusion with specific characteristics. The Assistant Collector, supported by the Deputy Chief Chemist's report and ISI specifications, concluded that the products were indeed pipes and tubes. The Collector of Central Excise (Appeals) upheld this classification, emphasizing that the products were commonly known as copper pipes and tubes in trade parlance. The Revenue failed to provide evidence to challenge the findings of the lower authorities, leading to the affirmation of the classification as pipes and tubes of copper.

Additionally, the judgment referenced Ministry's Clarification No. 212/7/86-CX. 6, which clarified that shells and blanks, although falling under a separate sub-item, were considered semi-finished goods eligible for conversion into pipes and tubes under specific conditions. The respondents had paid excise duty as applicable to pipes and tubes, in line with the clarification. The Tribunal noted that the issue of how the goods were assessed by customers after further processing was not under consideration. As the respondents had already paid duty aligned with pipes and tubes classification, and no compelling grounds were presented for interference, the Tribunal rejected the Revenue's appeal and disposed of the cross-objections filed by the respondent accordingly.