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TMI Blog2000 (12) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... had wrongly availed of the exemption under Notification No. 275/88-C.E., dated 4-11-1988 (as amended) by giving misleading description of the goods in the classification lists filed by them. With regard to Railway Inserts, it was alleged that they were railway track construction material, were finished goods for use in railway sleepers and were correctly classifiable under Heading No. 73.02 of the Tariff. As regards OHE fittings, it was alleged that after the goods were taken out of the cast moulds, they were subjected to the process of galvanisation. With regard to all the three products, suppression of facts with an intent to evade payment of central excise duty was alleged, and the extended period of limitation was invoked. Penal provisions were also invoked. The matter was adjudicated by the Collector of Central Excise, Vadodara, who under his order-in-original dated 23-11-1993 came to a finding that the goods in question after they were taken out of the casting moulds were subjected to various processes which took them out of the purview of exemption Notification No. 275/88-C.E. They were to be classified under Heading No. 73.25 of the Central Excise Tariff and duty at approp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be considered as unmachined. OHE fittings and electrical transmission caps were not declared in the classification lists. It was a clear case of suppression and the extended period of limitation has been rightly invoked in these proceedings. The learned SDR pleaded that the benefit of Notification No. 275/88-C.E. has been rightly denied and in the facts and circumstances of the case, the penalty and fine were fully justified. In rejoinder, the learned advocate, referred to the letter dated 29-8-1988 from the appellants to the Superintendent of Central Excise at page 188 of the paper book wherein information in respect of iron and steel castings manufactured by the assessee had been furnished to the Department. Their classification lists had been duly approved. Earlier on similar facts, show cause notice had been issued to them on 12-11-1986 and thus the conclusions drawn by the adjudicating authority in para 23 of the adjudication order were not correct. 3.We have carefully considered the matter. The appellants, M/s. Vishal, were engaged in the manufacture of (i) Malleable cast iron (MCI) railway inserts meant for fittings in railway sleepers to be laid on the railway track ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of pig iron and spiegeleisen. 05. Puddled bars and piling of iron. 06. Cast articles of iron falling under sub-heading No. 7325.10. [Notification No. 275/88-C.E., dated 4.11.1988 as amended by Notification No. 63/91-C.E., dated 25-7-1991.] 4.The issue for our consideration is, whether the above three products manufactured by the appellants could be considered as unmachined iron castings and unmachined cast articles of iron. In case they are considered to be unmachined iron castings and unmachined cast articles of iron, then they were eligible to enjoy the benefit of that Notification No. 275/88-C.E. 5.It is pertinent to note that it was not the allegation in the show cause notice that the goods in question had ceased to be castings and cast articles and had been transformed into specified machinery parts classifiable in other chapters relating to machinery parts. The classification of the goods had remained as cast articles even after they have been subjected to the processes as mentioned in the impugned order-in-original, and the only question for consideration is whether they were eligible for the benefit of exemption Notification No. 275/88-C.E. In the scheme of the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machines. They were having three such shot blasting machines each having the capacity of 250 kgs. wherein the black colour and scaling were removed. Each cycle was of 20 minutes duration. Keeping in view the drawings and designs as given by the customers, the castings were taken into hydrolic press. They were having two such hydrolic presses each of 20 tonnes capacity. These hydrolic presses were for removing ovality in the casting and for making them fit for marketing. The goods as cleared were embossed with suitable markings, such as, RT-381-V-90 for MCI inserts, 2422 for OHE fittings and W/S for metal parts for insulating caps. [refer internal page (3) of the Panchnama dated 22-1-1991 at page 100 of the paper book]. 7.Thus, it is seen from the Panchnama that M/s. Vishal were undertaking processes of annealing, fettling, removing extra burns by grinding etc. on the inserts after being taken out from the moulds. With regard to OHE fittings, they were getting the galvanisation process done from their job workers. In the adjudication order, the position has been summarised as under - First of all loose scrap are being bailed by the Bailing(1) Press; Then the M.S. Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will no longer remain as castings and that the processes to which they were subjecting their goods were not the process of machining. We find that in the Board's Circular No. 1/87, dated 18-2-1987 at 1987 (30) E.L.T. T-17, Bombay-II Collectorate Trade Notice No. 21/87, dated 23-6-1987 and Board's Circular No. 225/59/96-CX, dated 1-7-1996 issued from file No. 139/11/96-CX4, the issue for consideration was at what stage the castings acquired the essential character of the complete or finished machinery part. It had been clarified therein that the operations which do not alter the essential character of the castings, would not be enough to merit the classification of such castings as machinery parts under Chapter 84 or 85 of the Tariff, as the case may be. Such castings would more appropriately will be classified under earlier heading No. 73.07 and now heading No. 73.25 of the Tariff. The heading No. 73.07 during the relevant time covered "Castings of iron or steel, nor elsewhere specified in this Chapter (Chapter 73) or in Chapter 72." Corresponding to Heading No. 73.25 which covers "other cast articles of iron or steel". Circular No. 24/89-CX 4, dated 1-8-1989 - File No. 139/35/8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the classification of castings and forgings. [C.B.E. C. F. No. 139/2/81-CX. 4, dated 10-11-1981] These clarifications were also in the context whether the goods so described remained classifiable as castings or they were to be assessed as identifiable machinery parts. In the present case there is no allegation that after the processes as described in the Panchnama have been undertaken, the goods has assumed the form of an identifiable machinery parts to take them away beyond the purview of castings and cast articles to be classifiable as machinery parts in other Chapters of the Tariff. The various decisions referred to by the learned counsel are not applicable as the issue is not of change in classification but that of eligibility of the exemption notification, the goods remaining as iron castings and cast articles of iron. The Department has not sought to classify the products under Chapter 84 or 85 of the Tariff as 'Machinery Parts'. The issue is altogether different and could not be confused with the issue of classification whether as castings or as machinery parts. 10.We wish to reiterate at this stage that the issue for consideration is that of applicability of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing - 73.02 Railway or tramway track construction material of iron or steel, the following : Rails, check-rails and rack rails, switch blades, crossing frogs, point rods and other crossing pieces, sleepers (cross-ties), fish-plates, chairs, chair wedges, sole plates (base plates), rail clips, bedplates, ties and other material specialized for jointing or fixing rails - 7302.10 Rails - 7302.20 Sleepers (cross-ties) - 7302.90 Other We find that the matter is covered by the Tribunal's decision in the case of Hindustan Gas and Indus. Ltd. v. Commissioner of Central Excise, Vadodara, 1996 (88) E.L.T. 413 (Tribunal). The Tribunal had held that the inserts used as a raw material in the manufacture of concrete sleepers subjected to the processes of annealing in the oil fired furnace, fettling and removing extra burs by grinding etc. do not become any of the specified materials named in Heading No. 73.02 of the Tariff. They were classifiable under Heading No. 73.07 during the relevant period corresponding to the Heading No. 73.25 for the present proceedings. The Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Board's clarification also supports the case of the appellants. We may also refer to the Tribunal's decision in the case of M/s. Vishal Malleables Ltd. v. CCE, Vadodara, A.No. E/2731/87-B1, Order No. E/44/97-B dated 20-9-1996. The central excise duty in the present proceedings had been demanded with regard to the railway inserts as if they were classifiable under Heading No. 73.02 of the Tariff. In view of the above discussion, the appropriate classification of the inserts was as castings of iron and steel under Heading No. 73.25 of the Tariff. However, as discussed above, they were not eligible for the benefit of Notification No. 275/88-C.E., dated 4-11-1988 (as amended). Duty in respect of the inserts has to be re-worked out accordingly. 12.As regards OHE fittings, the issue for consideration is whether the galvanisation is a process of manufacture. The issue is whether the castings were machined castings or unmachined castings and not that a new article as a result of process of manufacture had come into existence. As we have clarified above, the issue is one of applicability of exemption notification and not that of classification into other products other than castin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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