1997 (7) TMI 241 - AT - Central Excise

Summary

Issues: Classification of products known as runners and risers under Heading No. 72.06 or as waste and scrap under Heading No. 72.03

In the present case, two appeals were filed by M/s. Hari Engg. Alloys and Steel Ltd. challenging the classification of products known as runners and risers. The main issue revolved around whether these products should be classified under Heading No. 72.06, which covers ingots, blocks, lumps, and similar forms of steel, or under Heading No. 72.03 as waste and scrap. The Revenue contended that the runners and risers should be classified as waste and scrap, while the appellants argued for classification under Heading No. 72.06.

The Tribunal examined the nature and purpose of runners and risers in the context of steel ingot casting. It was explained that runners are solidified molten metal channels leading to the ingot mold, while risers serve as reservoirs to compensate for volume decrease during solidification. The process of casting involves the use of runners to direct molten metal to the mold, and risers to ensure proper filling and prevent shrinkage cavities.

The Tribunal considered the Supreme Court's ruling in a previous case where it was clarified that runners and risers not fit for rolling were used for melting, and the Ministry of Finance had exempted ingots made from steel melting scrap. Additionally, a previous Tribunal decision highlighted that runners and risers fit for rolling could not be classified as waste and scrap under the relevant tariff entry.

Based on the above analysis, the Tribunal concluded that runners and risers fit for rolling should be classified under Heading 72.06, while those suitable only for metal recovery should be classified as waste and scrap under Heading No. 72.03. The decision was influenced by the broad wording of the tariff entry under Heading No. 72.06, which includes various forms of iron and steel beyond just ingots.

Ultimately, the Tribunal allowed both appeals in favor of the appellants, following the precedent set in a previous case involving a similar issue. The judgment emphasized the importance of considering the form and usability of the products in determining their correct classification under the relevant tariff headings.