1997 (3) TMI 301 - AT - Central Excise

Issues Involved:
1. Classification of the goods in question (wire rods).
2. Availability of benefit under Notification 101/88-C.E.
3. Effective date of changes in the Finance Bill, 1988.

Issue-wise Detailed Analysis:

Issue No. 1: Classification of Wire Rods
The primary issue was the correct classification of wire rods manufactured by the appellants using the continuous casting and rolling process. The appellants argued for classification under Heading 7601.30 as wire rods of unwrought aluminium or alternately under Heading 7604.10 as wire rods of wrought aluminium. The Department classified the goods under Heading 7605.11 as aluminium wire.

The Tribunal referred to the case of Hindalco Industries Ltd. v. CCE, Allahabad, which relied on Chapter Note 1(a) and 1(c) of Chapter 76 introduced by the Finance Bill of 1988. The definitions in these notes aligned with the Harmonized System of Nomenclature (HSN). Note 1(a) defined bars and rods as "rolled, extruded, drawn or forged products not in coils," while Note 1(c) defined wires as "rolled, extruded or drawn products in coils." The Tribunal upheld the classification of properzi rods in coil form as aluminium wire under Heading 76.05, stating that the statutory definition would prevail over trade understanding and ISI specifications. The Tribunal concluded that the properzi rods, involving rolling in the manufacturing process, did not satisfy the description of unwrought aluminium and thus could not fall under sub-heading 7601.30. Consequently, the classification under Heading 76.04 was also ruled out. The Tribunal upheld the classification under sub-heading 7605.11, answering this issue in favor of the Revenue.

Issue No. 2: Benefit of Notification No. 101/88 at Sl. No. 4
The appellants contended that the expression "wire rod" in the Notification should be interpreted according to commercial understanding, even if classified under Heading 76.05 as wire. The Tribunal, however, held that since the product was classified as aluminium wire under Heading 76.05, only the rates applicable to aluminium wires indicated in the Notification would apply. Therefore, Sl. No. 8 of the Notification, and not Sl. No. 4, would be applicable to the goods in question. This issue was also answered in favor of the Revenue.

Issue No. 3: Effective Date of Chapter Note 1(a) and 1(c) to Chapter 76
The Tribunal noted that prior to 1-3-1988, the rate of duty for sub-heading 7603.10 was 50% + Rs. 4000/- per M.T. As per the Finance Bill of 1988, the rate of duty for Heading 76.05 was also 50% + Rs. 4000/- per M.T. Since the rate of duty remained the same, the provisions of the Provisional Collection of Taxes Act, 1931 would not apply, as there was no imposition or increase in excise duties. The Tribunal referred to the case of Ess Ess Metals and Alloys v. CCE, where it was held that tariff changes brought about by the Finance Bill would be effective only from 13-5-1988 when the Bill was enacted as the Finance Act, 1988. Consequently, the demand for the period from 1-3-1988 to 12-5-1988 was set aside. This issue was answered in favor of the appellants.

Separate Judgments:
The Vice President dissented on the classification issue, suggesting that the properzi rods should be classified as "profiles" under sub-heading 7604.29, rather than as aluminium wire under Heading 7605.11. However, the Third Member agreed with the Member (Judicial), classifying the item under Heading 7605.11 and modifying the orders of the authorities below accordingly.

Final Order:
In view of the majority opinion, the item was classified under Heading 7605.11, and the orders of the authorities below were modified to the extent indicated in the order of the Member (Judicial).

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