Custom, Excise & Service Tax Tribunal
M/S Pioneer Industries vs C.C.E. & S.T.-Bhavnagar on 7 April, 2017
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad ~~~~~ Appeal No : E/837,1654/2008 (Arising out of OIA-46/2008/BVR/KC/COMMR-A-/AHD dated 07.05.2008, OIA-41-42/2008-BVR-/KC/COMMR-A-/AHD dated 07.05.2008 passed by Commissioner (Appeals) of Central Excise - Bhavnagar) M/s Pioneer Industries : Appellant (s) Versus C.C.E. & S.T.-Bhavnagar : Respondent (s)
Represented by:
For Appellant (s) : Shri S. J. Vyas, Advocate For Respondent (s): Shri S. N. Gohil, Authorised Representative CORAM:
Dr. D. M. Misra, Honble Member (Judicial) Mr. Raju, Honble Member (Technical) Date of Hearing: 03.04.2017 Date of Decision: 07.04.2017 Order No. A/10754-10755/2017 Per: Mr. Raju These appeals have been filed by M/s Poineer Industries contesting classification of Aluminium Bobbin under heading No. 7616.90 against their claim of heading No. 39.23.90/8448. of Central Excise Tariff Act. The second appeal is in respect of rejection of refund claim of the duty paid by the appellant on these goods. Aggrieved by the said orders, the appellants are before Tribunal.
2. Ld. Counsel for the appellant argued that there product Fibre Aluminium Bobbin is manufactured out of Aluminium and plastic. The appellant had sought to classify the same under heading No. 8448.0. However the classification was changed adjudication order dated 26.11.1993 to heading No. 7616.90 by the Assistant Commissioner. The order dated 26.11.1993 of Assistant Commissioner classifying the said product under heading No. 7616.90 was set-aside by the Commissioner (Appeals) vide orders dated 12.07.96 and the product was held to be classifiable under heading No. 3923.90. Vide order dated 13.12.1996 the Assistant Commissioner confirmed the demand of duty on the goods holding the same classifiable under heading No. 3923.90. Subsequently, vide the modification order dated 12.12.96 the Assistant Commissioner modified his earlier order of approval of classification lists dated 26.11.1993 by holding that the said goods are classifiable are said heading No. 3923.90 as against 7616.90. It appears that the Assistant Commissioner su-moto modified is earlier order dated 26.11.1993 by an order dated 12.12.1996 relying of Commissioner (Appeals) order dated 12.07.1996. Later on 5.3.1997, the Commissioner (Appeals) of Rajkot clarified that no order dated 12.07.1996 was issued by him. Later on vide order-in-appeal dated 14.02.2002, the Commissioner (Appeals) dismissed the appeal filed by the appellant against order dated 13.12.1996 wherein the demand of duty was confirmed against the appellant. The matter was thereafter agitated before Tribunal and Tribunal remanded the matter back to Commissioner (Appeals) to pass order on merit. As the order dated 14.02.2002 of Commissioner (Appeals) was passed for non-prosecution without going into metirs. In remand proceedings, Commissioner (Appeals) vide order dated 27.01.2006 held that OIA No. 388/96 (233-AHD)CE/Commr.(A).AHD dated 16.08.1996 classifying the product under heading No. 3923.90 was issued by Commissioner (Appeals) of Central Excise, Ahmedabad. The Commissioner observed as follows:-
7. I find that OIA No. 388/96 (233)-AHD)/CE/Commr(A)/Ahd dated 16.08.1996 was issued by the Commissioner (Appeals), Central Excise & Customs, Ahmedabad classifying the subject product under Chapter 39.23. I find that neither the Revwenue nor the appellant had preferred any appeal against the said OIA hence the said OIA has achieved finality. If the Commissioner (Appeals) order was not proper, the Revenue should have filed appeal with Tribunal against the said OIA. Therefore, questing of reinstating the OIO NO. 143 to 145/CL-D/93 dated 26.11.1993 does not arise.
8. I find that the show cause notices were issued to the appellant proposing classification of the product viz. Fibre Aluminium Bobbins Dynamically Balanced under Chapter SH 7616.90 instead of Chapter SH 8448.00 of the CETA, 1985 claimed by the appellant. The classification list were ordered for provisional assessment under Chapter Heading No. 1616.90 under Rule 172B read with Rule 9B of the CER, 1994 asking the appellant to execute Bond for the differential amount of duty and Bank Guarantee for the 25% of the Bond amount. The appellant had cleared the said goods by paying duty under Chapter Heading No. 1616.90 under protest instead of execution of Bond and Bank Guarantee. The Assistant Commissioner vide OIO NO. 143 to 145/CL-D/93 dated 26.11.1993 has modified the classification lists and approved under heading no. 7616.90 and confirmed the demands for Rs. 8,57,029/-. The Commissioner (Appeals) vide Order dated 388/96 dated 12.07.96 has classified product under Chapter 39.23. The Assistant Commissioner vide order dated 12.12.96 again modified the classification of the product and approved under heading No. 3923.90.
9 The appeal was filed by the department against impugned order on the ground that the adjudicating authority has erred in relying upon the Commissioner (Appeal)s order No. 388/96 dated 16.08.96 as the same was not issued by the Commissioner (Appeals), Central Excise, Ahmedabad and requested for reinstating the OIO NO. 143 to 145/CL-D/93 dated 26.11.1993. I find that OIA dated 16.08.96 was issued by the Commissioner (Appeals) duly attested by the Superintendent (Appeals), Central Excise, Ahmedabad. If the said OIA was not legal and proper, the department should have challenged it before the Tribunal. The OIO dated 26.11.93 was set-aside by the Commissioner (Appeals) vide OIA dated 16.08.96. Neither the appellant nor the department has filed any appeal against the said order hence said OIA has achieved finality. Aggrieved by the said order, Revenue filed an appeal before Tribunal. Tribunal set-aside the said order of Commissioner (Appeals) dated 27.01.2006 to re-examine the issue in light of the decision of Tribunal in the case of Nita Industries vs. Commissioner of Central Excise, Rajkot 2002 (282) ELT 706 (Tri.-Mumbai) and in the case of J. K. Synthetics Ltd. vs. CCE Kanpur-2006 (202) ELT 138 (Tri.-Del.). Consequently, the Commissioner (Appeals) passed the impugned order dated 19.05.2008 wherein relying on the decisions in the case of Nita Industries (supra) and J. K. Synthetics (supra) held that the goods are classifiable under heading No. 7616.90 and therefore he rejected the appeal filed by the appellant and allowed the appeal of revenue. He also rejected the appeal filed by the appellants against rejection of their refund claim. Aggrieved both these orders, the appellants are before Tribunal.
2. Ld. Counsel for the appellant argued that in appeal No. E/1654/2008 they have challenged the classification of the product namely Fiber Aluminium Bobbin. Ld. Counsel argued that the said product is used to wind yarn for the purpose of conveyance. He argued that the said product is meant for packing and conveyance of yarn. He argued that each bobbin weights 109.8 Gms and out of that only 47.3 Gms is Aluminium. The balance of 56.02 Gms is plastic. It was argued by the Ld. Counsel that in these circumstances the product is correctly classifiable under heading No. 39.23 as plastic articles for conveyance or packing of goods. He further argued that a more specific heading of the product has to be adopted in preference to a general heading, in terms of Rule 3 (a) of the Rules of interpretation. He argued that the essential character test would apply only when a article is equally classifiable under two different headings. He argued that since a more specific heading under Chapter 39 is available then by applying Rule 3 (a) of interpreting rules, the products should be classified under heading no. 3923.90 and not in the residuary heading no. 7616.90. He further argued that the decision of this Tribunal in the case of Nita Industries (supra) was based on predominance of weight of material used. If the same is applied to instant case the product would be classifiable under 3923 as predominant in the product is plastic and not aluminium.
3. Ld. AR relies on the impugned order.
4. We have gone through the rival submissions. Undisputedly bobbins are item used for conveyance of yarn. The yarn after and during manufacture is wound on bobbins and the same is cleared as such. The yarn when it is used for texturising or any further processing is used alongwith the said bobbins as the said bobbins are designed to with stand very high RPM during processing. Thus, it is apparent that the bobbins are designed for conveyance of goods. Interpretative Rule 3 (a), 3 (b) and 3 (c) reads as follows:
Rule 3: When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
(c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
It is apparent that the heading which provides the most specific description needs to be preferred to a general description. A perusal of the headings 3923.90 and 7616.90 clearly shows that the heading No. 3923.90 a specifically covers articles for conveyance or packing of goods of plastic whereas the heading No. 7616.90 is a residuary heading covering Other articles of Aluminium. It is apparent that the description article for conveyance or packing of goods is more specific description. Ld. Counsel has relied on the decision of Honble Apex Court in the case of Commissioner of Commercial Tax, U. P. vs. A. R. Thermosets (Pvt.) Ltd. 2016 (339) ELT (S.C.). Honble Apex Court in the said case observed as follows:-
22.?In this regard, another aspect needs to be noted. The Revenue does not rely upon another Entry under which bitumen emulsion can be taxed. The Revenue relies upon the residuary Entry which would only include goods, which cannot be covered under any other Entry in the schedule on application of the three-fold criteria. In the State of Maharashtra v. Bradma of India Limited - (2005) 2 SCC 669, the Court had observed that the general principle is that specific Entry would override a general Entry. Referring to the decisions in the case of Collector of Central Excise, Shillong v. Wood Craft Products Ltd. - (1995) 3 SCC 454 = 1995 (77) E.L.T. 23 (S.C.), it has been ruled that resort can be made to a residuary heading only when by liberal construction the specific Entry cannot cover the goods in question. Referring to Entry No. 90 in the said case, which covered tabulating, calculating, cash registering, indexing and data processing, etc., other than computer machines, it was held that the words did not contain words of limitation and would cover every species of cash registering machines, irrespective of their mode of operation. In the absence of any limitation or qualification as to the different kind of cash registering machines, there was no reason for such qualification and limit the Entry to a particular kind of cash registering machine. However, computers had been specifically excluded and were separately dealt with in Entry 97(a). The assessee, who was manufacturing electronic cash registers would, therefore, be covered by Entry 90 and not by the Entry relating to computers. A similar opinion has been expressed in Hindustan Poles Corpn. v. Commissioner of Central Excise, Calcutta - (2006) 4 SCC 85 = 2006 (196) E.L.T. 400 (S.C.) stating that residuary Entry is made to cover only those category of goods which clearly fall outside the ambit of the main Entry. The opinion proceeds further to state that unless the Revenue can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be made to the residuary Entry. The heading Nos. 7616 and 3923 reads as follows:-
76.16 Other articles of aluminium 7616.10 Nails, tacks, staples (other than those of heading No. 83.05), screws, bolts, nuts, screw hooks, rivets, cotters, cotter-pins, washers and similar articles - 30% 7616.90 Other - 35% 39.23 Articles for the conveyance or packing of goods, or plastics, stoppers, lids, caps and other closures, of plastic 3923.11 Of Polyurethanes 60% plus Rs. 40 Per kilogram 3923.19-Of other plastics 30% 3923.90-Other 30% In terms of interpretative Rule 3 (a) the description 3923.90 is more specific and describes the product more accurately. The same needs to be preferred over a more general description in heading No. 7616.90 Interpretative Rule 3 (b) would have no application if it is possible to classify the product in terms of interpretative rule 3 (a). Moreover, the appellant are submitted that the weight of the plastic in the product is predominant. Out of the total weight of 109.8 Gms of Bobbins 56.02 Gms consist of plastic.
4.1. In view of above, we hold that bobbins of the kind manufacture by the appellant and consisting predominantly of plastic are classifiable under heading No. 3923.90. Consequently, the appeal of E/1654/2008 is allowed. Since the appeal is E/837/2008 is in respect of consequent refund on the same ground, the same is also allowed.
(Order pronounced on 07.04.2017) (D. M. Misra) (Raju) Member (Judicial) Member (Technical) G.Y. ??
??
??
??
8Appeal No. E/837,1654/2008