Customs, Excise and Gold Tribunal - Delhi
Orient Steel And Industries Ltd. vs Collector Of Central Excise on 29 July, 1987
Equivalent citations: 1987(14)ECC224, 1987(13)ECR521(TRI.-DELHI), 1987(31)ELT979(TRI-DEL)
ORDER H.R. Syiem, Member (T)
1. This appeal had been dismissed for default by order No. 747/86-B1 dated 24-11-1986 after which M/s. Orient Steel Industries requested restoration of their appeal as, they said, they had not been able to attend the hearing as the vakalatnama signed by the authorised person in favour of their counsel could not be filed due to the fault in the office of the counsel. It was only after the matter had been heared that the appellants came to know about it and discovered the error. This application for restoration of the appeal was heard on 8-4-1987 and after hearing Shri Kamal Budhiraja counsel for the appellants and Smt. V. Zutshi, SDR, for the department, the bench estored the appeal to its original number.
2. he controversy in this apeal is the assessment of shots and grits. According to the manufacturers, M/s. Orient Steel Industries, Calcutta, shots and grits are castings and they are also known as castings. The learned counsel for the appellants, Mr. Banerjee, produced a copy of proceedings under Section (1)(e) of the Bombay Sales Tax Act, 1959 in the case of Wheelabrator Alloy Castings Ltd. In these proceedings, the Commissioner of Sales Tax Bombay, took the view that raw steel shots though made by a process different from conventional process of making castings would be covered by the term "steel casting" and that they fell within entry B-l-3(viii) within the meaning of Bombay Sales Tax Act, 1959. He also referred to a trade notice of the Deputy Collector of Central Excise, Calcutta No. 72/lron or Steel Products-3/1976 dated 10-3-1976 which announced that though the shots were made by a process different from conventional castings, "in view of the fact that technological advancement castings can be made without moulds, shots would merit classification under Item 26AA."
2.A. The learned counsel also produced a drawing showing the manufacturing process of shots. This is printed below :-
He said that from this diagram of the process, it would be seen that the shots were manufactured by a process akin and identical to casting. The molten iron is let out from the laddie and is intercepted by a jet of water at specific pressure. As a result, the shots are formed and fall into the water tank below. Though there is no mould as one finds in convenional casting process, the molten iron forms in a process just like casting to assume the desired form of shots. There has been no other process like forging, working, rolling, extruding etc. etc. The shots take their form independent of any of the processes mentioned; the process used ts the same as when the iron forms in a mould and takes the shape given to it by that mould. The learned counsel, therefore, declared that the shots must be understood to be castings. He produced a certificate dated 18th September, 1986 of the Engineering Export Promotion Council which certified that iron/steel shots and grits are classifiable as industrial castings. He also presented a printed leaflet of Raipur Rotocast Ltd., which proclaimed that the Rotocast steel shots are solid spherical balls of hypereu-tectoid steel given their spherical shape by a unique casting process. He, therefore, maintained that the assessment of shots and grits under Item 68 by the lower authorities was wrong as the goods were correctly assessable under Tariff Item 26AA(v).
3. The learned counsel for the department presented a definition in the Encyclopaedia of Metallurgy and Materials by C.R. Tottle, published by McDonand and Evans Ltd. Estover Plymouth. According to this publiation, casting is defined as the "operation of pouring molten metal into sand, metal or other moulds and allowing it to solidify. A metallic object which has been made by casting the metal into the shape required without any working other than machining". Grit is defined as "angular particles sand, siliceous matter or metal used as an abrasive or cleaning agent, particularly in grit blasting". Shotting is "the name used in reference to a method of producing powder for power-metallurgy processes. It consists in pouring molten metal on to a steel sheet which is held at an angle to a tank of water and deflects the metal thereinto. If the tank is not sufficiently deep the molten metal may not have completely solidified before reaching the bottom, and thus may adhere to it".
4. It is not possible, however, to accept these goods as castings. Castings are always produced by the method of pouring molten plastic matter into moulds. When the iron is molten, it is plastic enough to be formed by the receptacle which holds it and, if allowed to cool in that receptacle, will acquire that form permanently. All other similar materials like resins, gum, putty, clay, glass, etc. can be formed in this way, although some, because of their weak aggregating/adhering properties, do not form very strong shapes after the moulding. But all, because of their plasticity, can be formed if they are placed in a mould of the required shape and if heat and or pressure is applied. In the case of iron, pressure need not be applied because, being a heavy material, it will fill the void and form. This property is like the property exhibited by water which takes the form of the vessel which contains it; (and water, if frozen, will acquire and hold that form as long as its temperature remains below melting point). The iron, for the same reason i.e. lowering of temperature, olds the shape of the mould.
5. These shots and grits are not castings because they have not been formed in the way castings are formed. They have not been given their characteristic spherical shape by another shaping device, but acquire it when the molten iron is ejected from the laddie to form tiny pellets or balls which solidify on contact with the water. It is, therefore, not correct to say that these balls are castings. Even if some government agencies regard them as castings, we cannot do so, because we are satisfied that they are not castings and that the process of making them was not the process of casting. Therefore, assessment under Item 26AA is not correct.
6. The appeal is rejected.