Customs, Excise and Gold Tribunal - Delhi
Garg Strips And Rolling Mills (P) Ltd. vs Collector Of C. Ex. on 13 March, 1995
Equivalent citations: 1995(78)ELT93(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. M/s. Garg Strips and Rolling Mills have filed this appeal against the order-in-appeal passed by the Collector of Central Excise (Appeals). The Collector in his order had held :-
"I have given a thoughtful consideration to the submission made in the appeal memorandum and assessee contended in the written brief. It is observed from the impugned order that during the course of personal hearing, the sample drawn from appellants factory was examined by the adjudicating authority in the presence of the Counsel as well as it was found that the said sample was of rectangular cross-section having width of uneven thickness being less than 600 m.m., whereas the appellants contended that the sample contained uneven thickness which cannot be classified under Heading No. 7211.59. The ratio of CEGAT decision cited supra cannot be made applicable in the instant appeal as the said decision categorically refers to Iron and Steel products not having rectangular cross-section and width of uneven thickness and width less than 600 m.m. Their submissions in the written brief dated 12-10-1992 filed before the adjudicating authority that the word 'FLAT' prefixed to ROLLED PRODUCTS had been erroneously typed instead of words 'ROLLED PRODUCTS OTHER BARS & ROD OF UNEVEN THICKNESS AND WIDTH' is quite unbelievable and same appear to have been argued to maneuver their contention. The finding of the adjudicating authority are based solely upon the expert opinion of the Moti Lal Nehru Regional Engineering College, Allahabad in respect of samples reading as of the product drawn as under :-
"According to 1.5 code No. SP 6(1)-1964, this dimension lies in the range of Iron Strip."
It is further observed that the appellants have never claimed classification of the said products under Heading No. 7214.90 as Bars and Rods in earlier classification lists for which show cause notice has been issued. This indicated that they have deliberately classified the subject product under Sub-heading 7214.90 in order to pay the duty at lower rate, i.e., at specific rate of Rs. 800/- per MT instead of 10% ad valorem at which it is leviable. In the aforesaid view of the matter the arguments of the appellants relying on various decisions, which have no relevancy with the instant case, have no merit for consideration. The findings of the authority below have been arrived at with full reasoning and application of mind. The impugned order classifying the product under Heading No. 7211.59 is, therefore, confirmed and the appeal is rejected."
2. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of Flat Rolled Product of Iron and Steel. They filed a classification list No. 22/92 effective from 9-3-1992 claiming classification of their product as under :-
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S. No. Description of Product Chapter heading
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1. Other bars & rods of Iron or Non-Alloy Steel not 72.14 further worked than forged, hot rolled, hot drawn or hot extruded but including those twisted after rolling.
2. (a) Flat Rolled Products 72.14
(i) Thickness less than 3 mm & width less than 7214.90 75mm.
(b) thickness less than 3 mm & width 75 mm to 7214.90
200 mm
(c) Coils of straight length of thickness less than 7214.90
4.75 mm and width measuring 10 times of thick-
ness.
(d) Coils of straight length of thickness of 4.75 mm 7214.90
or more and of width exceeding 150 mm and
measure at least twice of thickness.
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3. The Department was of the view that the strips of Iron or non-alloy Steel of thickness less than 5 mm in various widths of less than 600 mm through hot rolling process manufactured by the appellants and claiming classification of their product mentioned in the classification list under sub-heading 7214.90 and claiming the rate of duty in terms of Notification No. 34/92, dated 1-3-1992, was not correct because on physical inspection of the goods manufactured by the appellants, the Department was of the view that the subject goods are hot rolled strips of thickness of less than 5 mm of non-alloy steel in width of less than 600 mm and the same being of thickness of less than 5 mm were classifiable under sub-heading 7211.59 as hot rolled strips of thickness less than 5 mm with 10% ad valorem under Notification No. 34/92, dated 1-3-1992. Accordingly, a show cause notice was issued to the appellants asking them to explain as to why their Flat Rolled Products of Iron or Non-Alloy Steel of thickness of less than 5 mm and of width less than 600 mm should not be classified under sub-heading 7211.59 instead of sub-heading 7214.90 as claimed by them. The appellants in their reply to the show cause notice submitted that there was no mention of Strips in the classification list filed by them; that they had no idea as to whether and when the physical inspection of the goods was conducted; that similar goods as are manufactured by them were being classified under Chapter Heading 7214.90 in other Collectorates and in support of their contentions the appellants submitted photocopies of GPls issued by the manufacturers of Chandigarh Collectorate. The appellants during the course of personal hearing also submitted that the word 'FLAT' against Rolled Products has been erroneously typed instead of Rolled Products other Bars and Rods of Uneven Thickness or Width. It was reiterated by the appellants that their product cannot be classified as Strips under Heading 7211.59 as the sample of the product drawn by the Department contained uneven thickness which cannot be classified as Strips under Heading 7211.59. The appellants also referred to CEGAT's decision in the case of Calcutta Steel Industries v. CCE reported in 1991 (54) E.L.T. 90 according to which Iron and Steel products not having rectangular cross-section and width of uneven thickness and width being less than 600 mm as other bars and rods for the period after 1-3-1988 and not as Strips. After careful consideration of the submissions made by the appellants, the Assistant Collector held that the products at 1(a) to (d) declared in their classification list effective from 9-3-1992 are classifiable under Heading 7211.59 instead of 7214.90 as claimed by the appellants.
4. Shri P.S. Bedi, the ld. Consultant appearing for the appellants submitted that Chapters 72 and 73 underwent changes w.e.f. 1-3-1983, 28-2-1986 and 1-3-1988; that the Hon'ble Supreme Court upheld the order of the Tribunal in the case of Calcutta Steel Industries holding that the rolled products shall be classifiable as Bar under the then Tariff Item 26A(a)(i)(a) of the First Schedule to the Central Excises and Salt Act, 1944; that the Tribunal while disposing of a number of appeals under the title Calcutta Steel Industries and Ors. reported in 1991 (54) E.L.T. 90 had held 'the said products' as Bars during the period from 1-8-1983 to 27-2-1986 and 28-2-1986 to 29-2-1988 and also w.e.f. 1-3-1988 onwards; that this decision of the Tribunal was squarely applicable to the product manufactured by the appellants; that there were a number of decisions of the Tribunal and a decision of the Hon'ble Bombay High Court .classifying the said product as Bar. The ld. Consultant for the appellant submitted that the appellants have a Small Scale Unit having a small Merchant/Bar Mill installed in their premises where there is no arrangement for rolling of edges or controlled contours or slitting or shearing of edges; that the products produced are of an uneven thickness and uneven width and are cleared in straight length bundles and not in coils; that such product is classifiable as other Bars in terms of the ratio of the judgment of the Tribunal in the case of Calcutta Steel Industries and the Hon'ble Supreme Court's judgment in the case of CCE v. Calcutta Steel Industries reported in 1989 (39) E.L.T. 175; that there were a number of decisions of the Tribunal and the Hon'ble High Courts of Bombay and Calcutta in accordance to which the product manufactured by them was classifiable as 'Other Bar'. Explaining the points further, the ld. Consultant submitted that the Flat is always of thickness more than 3 mm and therefore, the product of the noticee cannot be taken as a Flat; that the Strip is always in coil and have Sheared Rolled or Slitted edges; that the product of the appellants does not have the said specifications and, therefore cannot be taken as Strip; that the Central Board of Excise and Customs had already issued instructions for clearance of the product in question as other Bars under Chapter Heading 7214.90; that according to the definition of Flat Rolled Product it must have rectangular cross-section; that the product of the appellants is of uneven thickness and, therefore cannot have a rectangular cross-section; that to become a Strip it is essential to have Rolled, Sheared or Slitted edges; that the product manufactured by the appellants had neither rolled nor slitted or sheared edges; that the product was the product of a Merchant Mill and not of a Strip Mill. In support of his contention, the ld. Consultant referred to the Tariff Advice Nos. 4/67, dated 8-6-1987 and 31/78, dated 15-6-1979; that the admitted position was that the goods manufactured by the appellants had uneven thickness and if the thickness is uneven the goods can never have rectangular cross-section. Reiterating the submissions made before the lower authorities, the ld. Consultant submitted that in view of overwhelming evidence on the basis of the decisions of various Courts and the Tribunals, their case was fully covered and therefore their appeal may be allowed.
5. Shri Somesh Arora, the ld. JDR appearing for the Respondent submitted that before the submissions of classification list No. 34/92, dated 1-3-1992 the appellants never claimed classification of Flat Rolled Products under Chapter sub-heading 7214.90; that it was for the first time under this classification list they had claimed the classification of the products under this heading; that the contention of the appellants that the examination of the product was not done before them was not correct in as much as during the course of personal hearing, the sample drawn from their factory was examined in the presence of the appellants and their Counsel. It was found on examination of the sample that it was of rectangular cross-section and width of uneven thickness being less than 600 mm; that the definition of the strips as "hot or rolled products, rolled approximately in rectangular cross-section of thickness are usually 10 mm and below with Rolled, Trimmed or Sheared edges and supplied in coils or other drawn form (Straight length form) but excludes the hoop and strip." The ld. SDR submitted that expert opinion received from Motilal Nehru Regional Engineering College, Allahabad also supported the contention of the Department that the product was Strips; that the opinion was, "According to 1.5 Code No. SP 6(1)-1964, this dimension lies in the range of Iron Strip."
6. Heard the submissions of both sides and perused the evidence on record. We find that there are two competing entries in the instant case. The appellants have claimed assessment of the goods under Chapter Heading 7214.90 whereas the Department has held that the goods shall be classifiable under Chapter Heading 7211.59. The two entries are :
"72.14 : Other Bars and Rods of Iron or Non-Alloy Steel not further worked than forged, hot rolled, hot drawn or hot extruded but including those twisted after rolling.
7214.10 : Forged 7214.20 : of Free cutting steel 7214.90 : Other 72.11 : Flat rolled products of Iron or non-alloy steel, of a width of less than 600 mm, not clad, plated or coated.
7211.51 : Cold rolled (cold reduced) 7211.52 : Hot rolled, exceeding 5 mm in thickness 7211.59 : Other"
7. The claim of the appellants for assessment of the goods under Chapter Heading 7214.90 is based on the plea that the appellants had a Small Scale Merchant/Rolling Mill which was incapable of manufacturing Strips; that for being classified as Strips, the products must have a solid rectangular cross-section and the edges should be rolled and sheared. Chapter Note of 1(k) of Chapter 72 reads :-
1(k). "Flat-Rolled Products Rolled products of solid rectangular (other than square) cross-section, which do not conform to the definition at (ii) above in the form of:
...coils of successively superimposed layers, or ...straight lengths, which if of a thickness less than 4.75 mm are of a width measuring at least ten times the thickness or if a thickness of 4.75 mm or more are of a width which exceeds 150 mm and measures at least twice the thickness.
Flat rolled products include those with patterns in relief derived directly from rolling (for example, grooves, ribs, chequers, tears, buttons, lozenges) and those which have been perforated, corrugated or polished, provided that they do not thereby assume the character of articles or products of other headings.
Flat rolled products of a shape other than rectangular or square, of any size, are to be classified as products of a width of 600 mm or more, provided that they do not assume the character of articles or products of other headings."
8. It was contended on behalf of the appellants that admittedly the thickness of the products manufactured by them was uneven. It was therefore contended by them that because the thickness was uneven, therefore the cross-section cannot be rectangular. It was argued that the product was manufactured by a simple section/bar Mill which could not produce goods having solid rectangular cross-section. It was also contended that the practice in other Collectorates manufacturing identical goods was to assess them under 7214.90 and thus, there was a discrimination against them; that the case law specially the decision of this Tribunal in the case of Calcutta Steel Industries, where this Tribunal had held (in para 4) was applicable :
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9. As we are not concerned with the period prior to 1-3-1988, we shall for purpose of reference cite only the relevant portion.
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10. As against this, the Department had contended that in the earlier classification list, the product 'Flat rolled products of Iron and Steel' was being classified under Chapter Heading 72.11 which was evident from the classification List No. l/Garg/90 effective from 1-3-1990 and subsequent classification List No. 13/91 effective from 25-7-1991 which were approved by the department; that in the instant classification List No. 22/92, dated 9-3-1992, the product has again been described as 'Flat rolled products' and therefore the contention of the appellants that the word 'Flat' has been errorenously typed is not tenable; that the appellants had not adduced any ground as to why the classification was being changed; that the sample drawn on examination was found to have rectangular cross-section and the expert opinion given by Motilal Nehru Engg. College supported the view of the Deptt. that it was a flat rolled product; that this evidence was not before the Tribunal when it decided the cases cited and relied upon by the appellants.
11. We observe that there is a force in what the DR contended. In the case before us we find that the cross section of the product on physical examination was found to be rectangular, we also observe that the expert opinion which relied on technical literature also opined that the product had rectangular cross-section, we, therefore, agree with the findings of the lower authorities that the goods are classifiable under Chapter Heading 7211.59 and hold accordingly.
12. In the result the impugned order is upheld and the appeal is rejected.