1997 (4) TMI 298 - AT - Central Excise

Summary

Issues:
Classification of manufactured product as wire or strip under Central Excise; Interpretation of Board's circular regarding classification; Whether processes like cutting and polishing change the nature of the product; Establishing marketability of the product.

Analysis:
The case involved the classification of a product manufactured by subjecting circular wire to processes like drawing, polishing, etc., leading to a rectangular shape. The department classified the product as a strip under Item 25(12) of the Central Excise, demanding duty. The assessee contended that despite the processes, the product retained its character as wire. The Assistant Collector disagreed, leading to an appeal by the assessee. The Collector (Appeals) ruled in favor of the assessee, stating that the product did not lose its wire character and aligned with the definition of wire in the tariff.

The Collector (Appeals) heavily relied on a circular from the Government of India, stating that wire converted from round to flat shape through rerolling remains classifiable as wire, not a strip. The department challenged this reliance, arguing that the circular referred to flattened wire, different from the product in question (reed wire). The department emphasized that the product, after processes like cutting and polishing, met the definition of strips under Tariff 35.

The respondent's advocate countered by asserting that processes like polishing did not alter the product significantly. Additionally, he argued that the Collector (Appeals)'s finding that the product was recognized as a strip in the market was unchallenged. A new argument was raised regarding the department's failure to prove the marketability of the product.

The Tribunal analyzed the nature of flattened wire and the statutory definition of strips, emphasizing that the conversion process did not change the product to the extent of falling under the definition of strips. The Tribunal dismissed the department's argument that the circular only applied to products formed by changing round wires into rectangular shapes. It noted that the product, initially a wire meeting specifications, did not lose its wire identity by changing shape. The Tribunal upheld the Collector (Appeals)'s decision, stating insufficient grounds for interference and dismissed the department's appeal.