2000 (12) TMI 527 - AT - Central Excise

Summary

Issues: Classification of remnant metal as scrap or strips under the tariff.

In this case, the appellant, a manufacturer of metal containers, claimed that the remnant metal from their manufacturing process should be classified as scrap under heading 72.04 of the tariff, seeking the benefit of Notification 171/88. The department, however, alleged that the remnants were not scrap but strips, based on descriptions in some invoices and the intended use of the material for manufacturing other articles. The Assistant Commissioner initially classified the goods under heading 7211.90, which was later confirmed by the Commissioner (Appeals), leading to the appeal.

The Appellate Tribunal analyzed the dimensions and specifications of the remnants and found that there was insufficient evidence to classify them as strips under Note 1(k) of the tariff. The maximum width of the remnants was 532 mm, but there was no information on thickness or the proportion between thickness and width to meet the tariff requirements. The unanswered objection raised in the reply to the notice further supported the conclusion that the goods did not qualify as strips.

The Tribunal highlighted that the classification proposed in the notice (7211.90) differed from the one confirmed (7211.91), emphasizing that a different classification cannot be determined beyond what was proposed in the notice. Citing a precedent, the Tribunal clarified that a specific classification must align with the proposed one and cannot be altered arbitrarily.

Moreover, the Tribunal found no substantial evidence to suggest that the remnants were anything other than scrap. There was a lack of proof regarding the remnants' ability to be used as flat rolled strips or to manufacture specific goods. The argument that the goods were sold at a higher rate was deemed irrelevant without comparative context, while the sale to scrap dealers supported the claim that the remnants were indeed scrap.

Ultimately, the Tribunal concluded that the remnants were indeed scrap, and the appellant agreed to forego the benefit of Notification 171/88 based on a previous Tribunal decision. With this understanding, the Tribunal allowed the appeal, setting aside the previous order and directing the appellant to pay the applicable duty on the containers manufactured from the remnant metal.