Customs, Excise and Gold Tribunal - Delhi
B.H.E.L. vs Collector Of Central Excise on 12 July, 1999
Equivalent citations: 1999(113)ELT606(TRI-DEL)
ORDER S.S. Kang, Member (J)
1. The appellants filed this appeal against the Order-in-Appeal, dated 24-3-1993 passed by the Collector of Central Excise (Appeals), Trichy.
2. In the impugned order, the mill scale was held to be classifiable under sub-heading 7204.90 of the Central Excise Tariff as 'waste and scrap' of Steel.
3. Shri Z.U. Alvi, G.M. (Taxation), appeared on behalf of the appellants and submitted that this mill scale is generated in the process of manufacture of seemless steel tubes and submitted that the appellants claimed the classification of this mill scale under Heading 26.19 of the Central Excise Tariff. He submitted that this mill scale is nothing but thick layer of oxides deposited on the surface of the steel due to high temperature. For this, he relied on the Metal Hand Book, 8th Edition of American Society for Metals.
4. He, further, submitted that the revenue is classifying the mill scale under Heading 7204.90 as waste and scrap of steel. He submitted that as per Section Note 6(a) of Section XV, waste and scrap mean metal waste and scrap from the manufacture or mechanical working of metals. He submitted that the mill scale has not arisen due to manufacture or mechanical working of the metal. He further stated that he is not pressing the issue of marketablity or non-excisability and only pleaded for its classification under Heading 2619.00. He would therefore, pray that the appeal be allowed.
5. Ld. JDR, appearing on behalf of the Revenue, submitted that the appellants are not engaged in the manufacture of iron and steel. He, submitted that the Chapter Heading 26.19 covers the scalings and other wastes arisen from the manufacture of iron or steel. He submitted that the appellants are engaged in seemless steel tubes. Therefore, the mill scale formed during the process of manufacture of seemless steel, is classifiable under sub-heading 7204.90 as 'waste and scrap' of steel. He, therefore, prays that the appeal be dismissed.
6. Heard both sides.
7. In this case, the issue is in respect of classification of mill scale. Sub-heading 7204.90 covers "other waste and scrap and re-melting scrap'. The Section Note 6(a) of Section XV of Tariff describes 'waste and scrap' as metal waste and scrap from the manufacture or mechanical working of metals and metal goods definitely not usable as such because of breakage, cutting-up, wear or other reasons. There is no evidence to show that this mill scale has arisen from the manufacture or mechanical working of the metal.
8. The metals Hand Book, 8th Edition by American Society for Metals describes the scale as "it is specifically oxidized surface of steel produced during heating for working and during hot working of steel and the oxide produced on steel surfaces is known as mill scale".
9. The Collector of Central Excise (Appeals) in the impugned order admitted this fact that the mill scale which came into existence during the manufacture of seemless steel tubes is nothing but a thick layer of oxide formed in the surface of steel at high temperature.
10. The tariff sub-heading 26.19 of the Central Excise Tariff covers slag, dross, scaling and other waste from the manufacture of iron or steel.
11. As we find that this mill scale is nothing but a thick layer of oxide formed due to high temperature, as such this mill scale cannot be called as 'waste and scrap' of steel of the type covered by 7204.90. Chapter Heading 26.19 of the Central Excise Tariff specifically includes materials like slag, dross and scaling, and the mill scale generated in the manufacture of seemless steel tubes is nothing different from the scaling covered under this chapter and we also take note of the fact that the issue of marketability or non-excisability has not been pressed.
12. In view of the above discussion, the impugned order is set aside and the appeal is allowed.