1998 (7) TMI 358 - AT - Central Excise

Summary

Issues:
Correct classification of grinding media balls under Central Excise Tariff headings 7208 and 7308; Eligibility for exemption under Notification No. 208/83.

Analysis:
1. Correct Classification of Grinding Media Balls: The dispute in this case revolves around the correct classification of grinding media balls under the Central Excise Tariff headings 7208 and 7308. The Adjudicating Authority relied on Note 6 to Chapter 84 to classify the steel balls under Heading 7308, distinguishing them as other articles of iron and steel. The authority emphasized that the steel balls were not roughly shaped and did not require drastic machining before use, supporting the classification under Heading 7308. The order also highlighted specific requirements from a purchase order, indicating a tolerance of 1.5 mm for a 50 mm diameter, reinforcing the classification decision.

2. Interpretation of Chapter Note and Applicability: The appellant argued that the steel balls should be classified under 7208, citing the introduction of heading 7326 in the Central Excise Tariff after the material period. The appellant contested the reliance on Note 6 to Chapter 84, asserting that the note pertains to polished steel balls as parts of machinery, not unpolished steel balls. The Tribunal analyzed the distinction made by the note between machinery parts and other iron and steel articles, emphasizing that the steel balls in question were finished products, aligning them with the classification under Heading 7308.

3. Exemption under Notification No. 208/83: The appellant claimed exemption under Notification No. 208/83, arguing that even though sub-heading 7308 was not specified in the exemption table, Chapter 73 as a whole was mentioned in the notification. The appellant referenced a precedent regarding ship breaking scrap to support their exemption claim. However, the Tribunal ruled that the exemption applies only to goods specified in the table under Chapter 72, 73, or 84, and not to all goods falling under these chapters. The Tribunal rejected the analogy with ship breaking scrap, emphasizing the need for specific sub-heading mention in the exemption table for eligibility.

4. Correction of Duty Demand: An error in mentioning the duty demand amount in the adjudication order was raised by the appellant, highlighting a significant discrepancy. The appellant contended that the duty demand should align with the amount specified in the show cause notice, leading to a clarification that the higher amount mentioned was due to a clerical error. The Tribunal rectified the duty demand to the correct amount, ensuring accuracy in the financial aspect of the case.

5. Final Decision: After thorough consideration of the arguments and evidence presented by both parties, the Tribunal upheld the classification of the grinding media balls under Heading 7308 based on the interpretation of Chapter Note 6. The appeals were rejected, with the modification of the duty demand amount to align with the correct figures as per the show cause notice.