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TMI Blog2024 (10) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... e. coins, except for the embossing or printing of the logo and value etc. on the coin blanks - the cases relied upon by the appellants are of no use as the facts are different; the case of P. Chottalal Manufacturers Exporters [ 2022 (3) TMI 1489 - CESTAT MUMBAI ] is about the classification of aluminum plates remaining after punching; dispute in the cases of Colts Auto Pvt. Ltd. [ 1998 (9) TMI 229 - CEGAT, NEW DELHI ] and Neelmetal Products [ 2017 (3) TMI 1505 - CESTAT CHANDIGARH ] is about whether the aluminum circles arising out of punching would merit classification as parts of automobiles; as the facts are different, the ratio of the cases is not applicable - the coin blanks manufactured by the appellants as per orders of the mint have attained the characteristics of articles of copper and therefore, the appropriate classification would be under CETH 7419 as held by the impugned order. Whether copper strips and coin blanks constitute similar goods in order to avail benefit under Para 6.8(a) of Foreign Trade Policy, 2009-14? - HELD THAT:- It is found that though for the purpose of classification under the Tariff, coin blanks and copper strips have been classified separately, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut rounded corners; the item must possess uniform thickness, the item must not exceed 1/10th of the width and the item does not assume character of any other articles or products of other heading in order to be classified under heading 7409; as the coin blanks are geometrically cylindrical, cross-section forms a rectangle; it is evident from the drawing obtained from the Government Mint. He submits that Revenue disputes the classification on the ground that the cross-section is not rectangular and that the coin blanks are used for a specific purpose i.e making coins at the Government Mint; therefore, it must be classified under articles of copper i.e. CETH 7419. 2.1 Learned Counsel submits that the goods in question have not assumed the character of an article under Chapter Heading 7419 which is a residuary entry; residuary entry is meant only for those categories of goods which clearly fall outside the ambit of specified entries; unless it is established that the goods in question fall under any of the Tariff items mentioned therein, residuary entry cannot be resorted to in terms of Rule 3(a) of General Interpretative Rules to the Central Excise Tariff. He submits further that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Counsel for the appellants further submits that once Education Cess is added to the Customs Duties to arrive at the aggregate value of Customs Duties, in terms of proviso to Section 3 (1) of the Central Excise Act, 1944, the question of charging Education Cess once again does not arise, as held by the Tribunal in the case of M/s Sarla Performance Fibres Ltd. 2010 (253) ELT 203 (Tri. Ahm.); the Adjudicating Authority has confirmed the demand on the ground that the above decision has been appealed against by the Department; the appeal filed by the Department is dismissed by the Hon ble Supreme Court in the case of Meghmani Dyes Intermediates Ltd. 2014 (307) ELT A79 (SC), although on the ground of delay. He further relies on Kumar Arch Tech. Pvt. Ltd. 2013 (290) ELT 372 (Tri. LB) and Kadimi Tools Manufacturing Co. Pvt. Ltd. Final Order No.62400/20018 dated 15.05.2018- CESTAT Chandigarh. 5. Learned Counsel for the appellants submits lastly that extended period is not invocable as the issue involves interpretation of law; the impugned order acknowledges this fact; as there was no positive act of suppression, mis-declaration, collusion etc. with intent to evade payment of duty on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchangeable. 9. Heard both sides and perused the records of the case. The issues, which require deliberation in the instant case, are (i) whether the classification of the impugned coin blanks should be under Tariff Heading 74094000 as claimed by the appellant or 7419 as alleged by the Department; (ii) whether copper strips and coin blanks constitute similar goods in order to avail benefit under Para 6.8(a) of Foreign Trade Policy, 2009-14 and (iii) whether the demand is barred by limitation. 10. Coming to the issue of classification, learned Counsel for the appellants submits that in order to classify under Heading 7409, the item must be flat surfaced; the cross-section of the product must be rectangular, with or without rounded corners; the item must possess uniform thickness, the item must not exceed 1/10th of the width and the item does not assume character of any other articles or products of other heading. He submits that it is evident from the drawing obtained from the Government Mint that the coin blanks are geometrically cylindrical, cross-section forms a rectangle and therefore are rightly classifiable under Heading 7409 in terms of Chapter Note 1(g) to Chapter 74. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ats and similar containers for any material, of copper, of any capacity, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment (see the Explanatory Notes to headings 73.09 and 73.10). (3) Containers for compressed or liquefied gas (see the Explanatory Note to heading 73.11). (4) Chain and parts thereof, of copper (see the Explanatory Note to heading 73.15), excluding chains having the character of imitation jewellery (eg., watch chains and trinket chains) (heading 71.17). (5) Articles of copper of the types listed in the Explanatory Notes to headings 73.25 and 73.26. (6) Electroplating anodes of copper or of copper alloys (e.g., brass) (see Part (A) of the Explanatory Note to heading 75.08). (7) Tubes and pipes to which fins or gills have been attached, e.g., by welding, not elsewhere specified or included. (8) Cloth, grill and netting of copper wire and expanded metal, of copper. (9) Springs other than clock or watch springs of heading 91.14. The heading does not cover: (a) Woven fabric of metal thread, of a kind used in articles of apparel, as furnishing fabrics or the like (heading 58.09). (b) Prepared metal brazing plates of wire mesh (head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the chapter note, it is evidently clear that chapter heading 7409 applies mainly to the products which are in the nature of raw materials / intermediate products with regard to their end use Le. they are in the nature of items of general use which are further used for manufacture of any other articles whereas chapter heading 7419 comprises of items which are more definitive in nature functionally or otherwise. As per chapter note 1(g) of chapter 74 of Central Excise Tariff Act, 1985, an item meriting classification under chapter heading 7409 should not have assumed the character of articles of products of other headings therefore it is important to decide whether the coin blanks manufactured by the party are not covered by any other heading of chapter 74. A perusal of the manufacturing process of coin blanks indicates that in order to manufacture coin blanks the virgin metal comprising of copper, zinc and nickel are first melted in induction furnace converting the same into strips and thereafter are further rolled to reduce the thickness to the desired size. These strips are then further subjected to the process of punching, slitting of the edges to remove the side tracks and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the considered opinion that the coin blanks manufactured by the appellants as per orders of the mint have attained the characteristics of articles of copper and therefore, the appropriate classification would be under CETH 7419 as held by the impugned order. Therefore, we find that the ratio of the cases relied upon by the appellants have been rightly distinguished by the Adjudicating Authority and the learned Authorized Representative. When the items are clearly capable of being classified under CETH 7419 reference to advance Rulings by U.S. Customs is not required. Moreover, we find that Tribunal in the case of Madras Cements Ltd.- 2018 (362) ELT 822 (Tri-Chennai) held that: 7 . The appellants have also taken recourse to the rulings of Harmonized Tariff Schedule of the United States (HTSUS) for products with brand name Uniazul and Uniblock which the mixture containing port land white cement and marble sand with the ratio of marble sand to cement being approx. 2.3 : 1. Uniblock contains 3.2% Hydrated lime and small amounts of calcium stearate, glass fiber, and pigments, in addition to cement and marble sand, the ratio of marble sand to cement being approx. 3.8 : 1. Uniazul wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the items being not similar and commercially interchangeable, the eligibility of sale on concessional rate of duty, in DTA, cannot be decided together. The appellants contend that as per the provisions of Para 6.8 of Foreign Trade Policy, similar goods can be sold in DTA and similar do not necessarily mean identical goods. The appellants have relied upon the decision of the Tribunal in a few cases as cited above. We find that in the case of appellant themselves 2013-TIOL-139-CESTAT-DELHI, Tribunal held that: The items exported by the appellant the copper alloys coins blanks and copper zinc nickel strip are the similar products, both falling under heading 7409 and since the DTA clearances are within the overall entitlement of 50% of the FOB value of the exports, in accordance with the provisions of Para 6.8(a) of the FTP the DTA clearances of any one of these products can be made up to 90% of the FOB value of the export. The DTA Sales of copper alloy coin blanks are well within 90% of their clearances. In view of this, the third objection of the Department also does not appear to be valid and as such the duty demand of Rs.83,23,000/- does not appear to be sustainable. 17. We fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OU unit manufacturing more than one product may not be able to export all the products in the same proportion; the overseas market may not have demand for all the products manufactured by them. Understandably, EOU cannot be expected to throw away or destroy the product or sell in DTA at a higher rate of duty resulting in financial loss. We find that, under these circumstances, a provision has been built in to the FTP, provision has been made to enable the manufacturer to sell such goods in DTA. The Limitation of 90% of FOB of the products appears to have put to ensure that there is export of all the products manufactured and to ensure that a product which is not at all exported is not cleared in DTA. We find that, as the EOU scheme is based on value of clearances, once export obligation is fulfilled, the manufacturer cannot be constrained to clear particular products in DTA in proportion to the export of the specific product. This appears to be the understanding of the tribunal in the series of judgments cited above. Moreover, the facts and circumstances of the instant case being similar to that of the cases cited above, we find that the goods cleared in DTA are to be held to be si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e done is to calculate the aggregate of customs duties and thereafter apply it to 100% EOUs. Unless the calculation method adopted for arriving at aggregate of customs duties itself is challenged, which to our mind has not been done till now, challenging the same on other grounds does not appeal to us. As regards the submission that there is no specific exclusion of CVD in the provisions relating to education cess as compared with Section 3 of Customs Tariff Act, it is well accepted that additional customs duty is levied after calculating the excise duty leviable on like goods manufactured in India. This is the logic for levy of education cess separately on CVD while calculating customs duties. 19. Now, we turn our attention as to whether penalty can be imposed under Rule 25 of the Central Excise Rules. Learned Commissioner imposed a penalty of Rs.50 Lakhs on the appellant while observing that the main issue is of interpretation of law and therefore, he did not take a harsh view. We find that the issue is about interpretation of the legal provisions and looking into the fact that a couple of advance rulings of U.S Customs are in favour of the appellants on the issue of classificati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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