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TMI Blog1987 (11) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... yers of paper are passed through a glue tank on to the mandrel and a tube is formed; the same is cut to the desired sizes. The open ends of the tubes are closed by sheets of plastic or hardboard or plywood, depending upon the customers needs. Necessary arrangement in the tube for fixing these is provided. The container is supplied in one piece with the bottom and top ends closed in the manner described above. The classification list filed for the goods for assessment under Item 17(4) CET was approved by concerned Central Excise authorities. Later on, however, demand was raised for payment of differential duty holding the goods to be falling under Item 68, and the same was confirmed by the Assistant Collector. Against this demand, the appellants filed an appeal before the Collector (Appeals). Their plea for assessment under 17(4) CET was, however, negatived. 3. Learned advocate for the appellants, Shri C.L. Beri, pleaded that after the classification list for assessment of the goods under Item 17(4) CET was approved, the authorities issued a Trade Notice in August indicating the goods to be assessable under Item 68 and a show cause notice was issued by the Superintendent demandin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or convenience of reference : , Sub-item (3) covers carbon and other coping paper including duplicating stencils and transfer papers whether in rolls or in sheets or cut to size whether or not having a decorative value, bags, cones, packets, sacks, boxes, cartons, drums fitted with re-inforcing circular bands of other materials, tubular containers for posting documents garment bags, the like are also covered under this sub-item. He pleaded that once Tariff Advice had been issued, the same was binding on the authorities and any clarification issued subsequently would only have effect prospectively. He cited the following case law : (1) 1983 E.L.T. 2358 (Cegat) in case of Rayalaseema Cable Corporation, Cuddapah v. CCE, Hyderabad (Para 5). (2) 1977 E.L.T. (3 67) (Guj.) in case of Navgujarat Paper Industries v. Superintendent of Central Excise and Others. The learned advocate pleaded in short as follows : (i) The container by virtue of material used for forming the tube notwithstanding other material used to seal at the bottom and top should be considered as article made of paper, should be held to be assessable under 17(4) CET; (ii) Once the classification has been app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere to include plastic torch in articles under Tariff Item No. 15A(2) on the ground that a plastic tube is used for manufacturing plastic torch. Articles such as tubes, rods, sheets, foils, sticks etc. of plastic material merely describe plastic material in different shape and form and each word used therein takes its colour from the word just preceding and just succeeding and the adjectival clause articles made of plastics . Articles made of plastic meaning article made wholly of commodity commercially known as plastics, and not articles made from plastics along with other materials. By no canon of construction, a plastic torch can be read in conjunction with plastic tubes, rods, sheets, foils ; etc. made of plastics. Plastic torch is a distinct and different commodity commonly known in the market as torch. Ordinarily, torch is not described by the name of the material used in the tube in which the device of torch is housed. The commodity known advertised, sold and offered in the market is torch. Prefix plastic merely describes the quality of torch as distinguished from other type of torches. It is not sold primarily as plastic tube." She pleaded that the Assistant Collector ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istant Collector is competent to re-open the issue of classification after having approved classification list; (iii) whether the demand could be raised for the period prior to the issue of the show cause notice or whether the revised classification would be applicable only from the prospective date. 6. We observe that the issue has arisen with introduction of the new Tariff Item 17(4) CET and under this item certain specified articles of paper and paper board are covered. The containers manufactured by the appellants admittedly are not wholly made out of paper but comprise of a central tube which is sealed at both the ends to make it a container by discs or circles made of material other than paper and paper board. The appellants have themselves described the goods as composite containers. Unlike in the Case of Customs Tariff, there are no interpretative rules or Chapter Notes incorporated in the Central Excise Tariff for determining as to under which Tariff Heading goods would fall in case the goods are made out of two different raw materials when a tariff entry is worded as in the case of Item 17 CET. The Tariff Entry as it stood at the relevant time is as under : 17. Pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial character of the product in question. Besides this, the principle of essential character of an article for classifying the same under Customs Tariff has no application in Excise Tariff classification. In the Excise Tariff classification, the words mentioned in the tariff itself must be given their natural and popular meaning. Tariff Item 17(4) speaks of articles made of paper and paper board. This evidently suggest articles made of paper with all essential parts of the same material. Thus, there are boxes, cartons etc. for shoes, cigarettes, sweet-metas and a host of other goods made of paper/board in all essential parts. At most, they may have metal staples to hold the corners i.e., for reinforcement, but these articles i.e. Vim Containers and Defence Containers cannot be said to be the articles of paper or paper board. These are composite containers made of paper, paper board and other metal components. The metal components perform roles as essential as the paper tube viz. that of containment. Their correct classification is under Tariff Item 68 CET and not under Item 17(4) CET. The authorities below have rightly classified these articles under Item 68 CET. We do not find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that under Section 11A, the Assistant Collector has the authority for reviewing the approval already granted. It is seen that the Hon ble High Court of Karnataka took note of the observations of the- Hon ble Supreme Court in the case of D.R. Kohli and Others v. Atul Products 1985 (20) E.L.T. 212 when the question of the scope of Rules 10 and 10-A (the predecessor provisions to Section 11A) was considered. The Hon ble Supreme Court held that any error committed at the time of granting of classification can be corrected under Rule 10A. The Karnataka High Court held that the issue of the classification can be re-opened and demand raised as a consequence thereof under Section 11A. We, observe that in the case of Ajanata Iron and Steel Company referred to supra by the appellants, the question of raising of demand under Section 11A was not considered by the Hon ble High Court and the position in terms of this Rule was not examined. In fact, the High Court in para 8 has observed as under : We think we should make it clear that if the classified list is one which had not previously been approved by the Assistant Collector MOD-II then only can the question of denying approval be ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manifestly fair manner, as evidenced by the fact that at one stage even the show cause notice was withdrawn. It is thus a case where Collector s Review Order is certainly for cogent reasons, and within the ambit recognised by the judicial authorities. However, we find justification in the plea made alternatively that, in any case, in view of the previous stand consistently conveyed to the party, the demand for recovery of duty retrospectively could be sustained. We, therefore, considering peculiar circumstances of this case, consider it to be a fit case to hold that the demand of duty for the period preceding the date of the show cause notice was in no case justified. Although learned counsel for the appellants urged that the demand should be enforceable with effect from the date of the Review Order of the Collector, but we feel that the party was put on notice, that the Department was likely to undertake a review of the position as soon as the show cause notice was issued on 24-9-1980. We were also given to understand during hearing that in fact duty was paid from that date under protest, and passed on to the consumers. We, therefore, think that it will be both justified in law, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were first held to be assessable under Tariff Item 17(4) and after about two months the matter was taken up for examination. There was a Trade Notice also issued after the introduction of the item and according to that bags, cones, packets, sacks, boxes, cartons, drums fitted with reinforcing circular bands of other materials, tubular containers for posting documents, garments, bags and the like are stated to be covered under new item. There was, however, no mention of the composite containers in this Trade Notice and in a general way tubular containers for posting documents were shown to be covered under this. It is not the appellants case that the containers manufactured by them answer to that description. Further, the drums covered under this item, as indicated in the Trade Notice, are those as are fitted with re-inforcing circular bands. It is not again the appellants case that the containers manufactured by them have merely bands of other materials for re-inforcement fixed therein. In fact, the bottom and top ends are the essential components for the purpose of formation of the containers manufactured by the appellants. In this view of the matter and in the background of thes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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