1998 (3) TMI 341 - AT - Central Excise

Summary

Issues:
Classification of scrap of non-alloy steel under sub-heading 7204.10 or 7204.90 of the Central Excise Tariff Act.

Detailed Analysis:

1. Issue of Classification: The primary issue in this appeal pertains to the correct classification of scrap of non-alloy steel under the Central Excise Tariff Act. The lower authority classified the scrap under sub-heading 7204.90, considering the material as non-alloy steel. However, the appellant, M/s. Metal Containers Pvt. Ltd., argues that the scrap should be classified under sub-heading 7204.10 as iron scrap, emphasizing that the material used is essentially iron sheets and not non-alloy steel.

2. Appellant's Contentions: The appellant contends that the terminology "non-alloy steel" is synonymous with "carbon steel" and includes materials like very low carbon steel with minimal manganese and silicon content. They argue that the trade nomenclature and commercial names, such as iron sheets, should be considered under the category of non-alloy steel. Additionally, they rely on Note 5 to Section XV of the Tariff, which treats iron and steel as the same metal for classification purposes.

3. Legal Interpretation: The Tribunal analyzed the relevant provisions of the Central Excise Tariff Act, specifically Heading 72.04, which distinguishes between ferrous waste and scrap. Sub-heading 7204.10 specifically covers scrap of iron, while the scrap in question is of non-alloy steel. The Tribunal rejected the appellant's argument that iron and steel should be considered the same metal for classification, citing that the reliance on Note 5 to Section XV is misplaced. The Tribunal emphasized that for the purpose of classification, iron and steel are not interchangeable.

4. Decision and Rationale: After considering the submissions from both parties, the Tribunal concluded that the scrap generated by the appellant, derived from the use of mild steel as input, should be classified under sub-heading 7204.90 as non-alloy steel scrap. The Tribunal dismissed the appeal, affirming the classification determined by the Commissioner (Appeals) under sub-heading 7204.90. The decision was based on the specific classification criteria outlined in the Central Excise Tariff Act, which clearly differentiated between iron scrap and non-alloy steel scrap.

In summary, the Tribunal's judgment upheld the classification of scrap of non-alloy steel under sub-heading 7204.90 of the Central Excise Tariff Act, rejecting the appellant's argument for classification under sub-heading 7204.10 as iron scrap.