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TMI Blog1998 (3) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... 56B with due permission of the Collector for further graphitisation of the same and clearance therefrom as graphite P/2 electrodes on payment of duty under Tarriff Item 67. A portion of the said blanks was also being removed by the appellant by selling the same to M/s. Carbon Corporation Limited, Nasik, which is an independent unit on payment of duty under Tariff Item 68. The entire dispute relates to the correct clarification of these blanks sold to M/s. Carbon Corporation Ltd. Whereas the appellant contends that the blanks are classifiable under the residuary Tariff Item 68 inasmuch as the same are not graphite electrodes so as to fall within the ambit of Tariff Item 67. The department s stand is that they are classifiable under Tariff Item 67. Accordingly, the lower authorities have confirmed the differential demand of duty of Rs. 34,85,483.36 raised against them vide eight different show cause notices related to the period ranging from 4th Sept., 1980 to 28th July, 1981 and from 25th Oct., 1982 to March, 1985. 2. As per the chronological date on record, the appellant filed a clarification list dated 14-9-1980 with their jurisdiction Central Excise authorities claiming the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the residuary Tariff Item 68 as `goods not elsewhere specified . Drawing the attention to the manufacturing process of graphite electrodes as detailed in their memo of appeal, she submitted that the different types of blanks which emerge as intermediate products at different stages cannot be equated to the graphite electrodes as the same are used in the steel industry for passing of high temperature as an excellent conductor of electricity with minimum resistance. Referring to definition of electrode as appearing in McGraw Hill Dictionary of Scientific and Technical Terms and Condensed Chemical Dictionary by Gessner G. Hawley, she submitted that the blanks cannot be considered an electrodes as they are not capable of performing the function of electrodes. It is appropriate to reproduce the definition of electrode and graphite as given in the above two dictionaries. Mc. Graw Hill Dictionary : Electrode : 1. An electric conductor through which an electric current enters or leaves a medium. Whether it be an electrolytic solution, soil, molten mass, gas or vacuum. 2. One of the terminals used in dielectric heating or diathermy for applying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and electrodes are entirely different and blanks need to undergo much more process before the same can be termed as electrodes. Attention was also drawn to the HSN Explanatory Notes as appearing in Chapter 38 and Chapter 85. She also relied upon the certificate given by the buyer of the blanks as regards the end-use of the same certifying that they are furthur used in the manufacture of graphite electrodes. Stressing upon the point that graphitisation is necessary to convert the green blanks into graphite electrode, she drew the attention of the Bench to the following paragraphs appearing in Chapter 15 of a book titled - Historical Aspects of Manufactured Carbon :- (Page 279) : The electrical resistivity varies inversely as the elemental carbon content, directly with the ash content, directly with the percentage of volatile matter, and inversely as the apparent and real densities. The percentage change resistivity of carbon and graphite electrodes as a function of temperature as well as base material is shown in Fig. 164. (Pages 279 280) As the percentage of graphite in electrodes increases the resistivity will decrease, since graphite has a resistivity about 1/4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and baked blanks as appearing at page 109 of the paper book, she submitted that the same are in contrast to the final electrodes having high electrical resistance. Baking of green blanks at high temperature has the effect of converting high resistance Green electrode into a low resistance product. Support was also drawn from ISI specifications. Preferring to Supreme Court decisions, learned Advocate submitted that commercial under-standing is the criteria for the correct classification and in commercial parlance, the green and baked blanks are not understood as graphite electrodes. She prayed for allowing the appeal by classifying the product under Tariff Item 68. 4. Arguing on behalf of the Respondent Collector, Shri R.K. Roy, learned JDR reiterated the reasoning of the lower authorities adopted by them in the impugned order. He submitted that Tariff Item 68 being residuary entry should be resorted to only when the goods do not fall under any of the entries from 1 to 67. Learned JDR argued that Entry 67 covers graphite electrodes and anodes of all sort and as such, the green blanks, baked blanks and pitch impregnated blanks would also get covered by the said entry though stri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other ingredients in steam jacketed mixers, at controlled elevated temperatures. This homogenous mix is transferred to a cooling stage, reducing the mix to a semi-plastic state. After cooling the mix is extruded through a highly sophisticated hydraulic extrusion press under carefully controlled temperature and pressure conditions to give it the desired shape. The product, after extrusion, is water-cooled and is called Green Blanks . The Green Blanks are not capable of conducting electricity and get deformed on heating. (b) Baking . - The Green Blanks are baked in Gas/Oil fired recirculation type pit furnace at a very slow and controlled rate to a maximum temperature of 700-9000C. The heat generated carbonises the binder pitch where forming bonding bridges between the coke particles. In effect, the volatiles present in the pitch added during extrusion escape and the left over carbon of pitch binds the coke particles to give a rigid shape. The tar oils present in Green Blanks are removed. These baked carbonaceous blanks are hard, abrasive and retain their form. The process of baking conditions the stock for further processing, namely, graphitization. At this stage the electric r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from its amorphous stage to graphite crystalline stage and therefore machining is necessitated. The basic characteristics of graphite electrodes are all present in the first extruded green blank. The test results of the samples tested at National Test House, Alipore, Calcutta also reveal that the said goods have similar ingredients, properties and compositions to those of graphite electrodes and anodes. Further, from the various technical write-ups relied upon by the appellant, these blanks have been referred as electrodes. For example paragraphs from Chapter 15 of the book titled `Historical Aspects of Manufactured Carbon refers to green blanks as green electrodes and is to the effect that the term green is to distinguish them from the finished electrode. The relevant lines are appearing at pages 32 and 34 of the paper book read as follows :- The carbon, after being pressed and shaped are termed `green to distinguish them from the finished and baked electrode . Baking has for its object the conversion of a high resistance `green electrode into a low-resistance product . From the above discussion, it becomes clear that these blanks are also electrodes having all the cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blanks as classifiable under Tariff Item 67. No appeal was filed by the appellant challenging the approval of the said classification list. As such, the same attained finality and was operative during the period in question. The subsequent letter dated 29-7-1981 of the Assistant Collecter re-classifying the product under Tariff Item 68 has been discarded by the authorities below on the ground that re-classification was not effected by any reason and speaking order and the issuance of said letter was without any sanctity of law and as such, without any binding force. The Collecter (Appeals) has observed that the only order of final approval of the classifiction list was the order dated 12-5-1981 which was not upsetted by any appellate order. We fully agree with this reasoning of the Appellate Collector. No doubt the Assistant Collector can change the classification list but he cannot pass a second order in respect of the same classification list for which order of approval has already been passed by another Assistant Collector having jurisdiction and power to do so. The said order of approval could be upsetted by an order of the appellate authority and not by an order of the equiva ..... X X X X Extracts X X X X X X X X Extracts X X X X
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