Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Ex. vs Tube Investment Of India Ltd. on 30 November, 1993
Equivalent citations: 1994(71)ELT291(TRI-DEL)
ORDER S.D. Mohile, Member (T)
1. The issue involved in this appeal is whether shutter lath sections, guide channels and bottom plates manufactured by the appellants and used in the manufacture of shutter are classifiable under Heading No. 7216.20 which covers "Angles, shapes ar sections of iron or non-alloy steel - not further worked than cold formed or co - finished." as claimed by the appellants or under heading No. 73.08 which covers, inter alia, "shapes, sections, tubes and the like, prepared for the use structures of Iron or Steel as claimed by the Department.
2. The learned Adjudicating Authority in the impugned order has o served as under
"The sections, viz. shutter lath, guide channel and bottom plate manufactured by the assessee find use in the manufacture of shutters. Heading 7216 covers sections and 7308 covers sections prepared for use in structures of iron or steel. In this case, the products are sections prepared for use in the structures of iron or steel i.e. shutters by the shutter manufacturers."
3. The learned Appellate Authority has set aside the Order-in-Origir for the reasons given in the concluding portion of para 6 and 7, inter alia page and 6 of the Order-in-Appeal which is reproduced below for facility of refe ence.
"From the above, it is very clear that only 'structures' and parts of structures of iron or steel are covered under heading 73.08. The heading 73.08 further covers plates, rods, angles, shapes, sections, tubes and the like prepared for use in structures, of iron or steel. In the present case, the impugned items, admittedly, are cold roll formed sections and are used in the manufacture of shutters and not structures. In other words, the impugned items are used in the fabrication of shutters and they are not used in structures. It may be mentioned that by no stretch of imagination, it can be said that the impugned items used in the manufacture of 'shutter' which is a part of structure are also meant for use in structures. The contention of the lower authority that "In this case, the products are sections prepared for use in the structures of iron or steel i.e. shutters", is misconceived in as much as 'shutters' can not be considered as 'structures' because 'shutters' are specifically mentioned as parts of structures in the heading 73.08. The lower authority has wrongly equated shutters with structurps. Admittedly, the impugned items are used as parts in the fabrication of shutters only as stated earlier. It is not disputed that the sections manufactured by the appellants are produced by the process of cold roll forming and are known as shutter lath, guide channels and bottom plates and this fact has also been confirmed by the lower authority in his order. Sub-heading 7308.90 provides classification for other parts of structures not specified under subheadings 7308.10 to 7308.40 and the impugned items i.e. parts of shutters are not at all classified under the sub-heading 7308.90. Hence, the contention of the lower authority that the goods i.e. shutter lath, guide channel and bottom plate are classifiable under heading 7308.90, in my considered view, does not appear to be correct.
The process of manufacture of the impugned items and their usage are not disputed. It is also not disputed that the impugned goods after getting despatched from the appellants' factory undergo further operations in the hands of the customers at the other end. The factual position that the sections manufactured by the appellants are in long running length and they are marketed as such without any further operations or preparation is also not disputed. To put them all in a nutshell, it may be stated that, it is not disputed that the impugned goods at the time of leaving the appellants' factory are cold formed sections not further worked. Sub-heading 7216.20 provides specifically classification for 'sections' not further worked than cold formed or finished. As stated earlier, the impugned goods are sections only, and admittedly are known as guide channel, bottom plate and shutter lath. Further, the impugned goods are not the only parts that go into the manufacture of shutters. The customers along with the impugned goods, add their own products also in the fabrication of shutters.
4. During the hearing the learned consultant has pleaded for upholding the Order-in-Appeal. He has also given a written submission/elaborating his arguments made during the hearing.
5. The learned JDR has reiterated the Order-in-Original.
6. Considered. The reasons given for re-classifying the goods vinder reference from Heading 7216 to Heading 7308 by the learned Adjudicating Authority are that:
(i) "In this case the products are sections prepared for use in structures of Iron or Steel, i.e. shutters by the shutter manufacturers":
(vide para 8 of the Order-in-Original)
(ii) When goods are prima facie, classifiable under two or more headings classification shall be effected in a way that heading which provides the most specific description shall be preferred to headings providing a more general description as per Rule 3 of Rule for the interpretation of the Schedule to the Central Excise Tariff Act, 1985.
(Vide para 9 of the Order-in-Original)
7. In this behalf the main grounds on behalf of the appellants are that:
1. It is not disputed that the products are cold formed sections;
2. These have not been further worked after cold forming;
In particular, it is denied that these have been "prepared for use in structures" as required for classification under heading 73.08.
8. In this behalf it is claimed that following further processes have to be carried out on the sections manufactured by the appellants before these can be used in the manufacture of shutters :
(i) Two ends have to be bent and shaped;
(ii) The lath section should be bent in the form of convex corrugation; and
(iii) The lath section have to be cut into required sizes;
9. This last requirement holds good for bottom plates and guide channels also both of which like to Fetch lath sections are cleared by the appellants in running length. The appellants have also given an opinion of an "Expert" who is an architect, in support of their plates.
10. The learned JDR contested the certificate of the "Expert" on the ground that he was a computer design consultant.
11. It is seen that "Computer design consultants" are Architects, Engineers and Valuers and are specialised in civil and structural engineering. Further there is one more certificate given by "Vinayagar Engineering Works" who buy the sections from the dealers of the appellants in the required length who supply the same by cutting the sections in running lengths supplied by the appellants to their dealers.
12. As seen from the letter dated 23-7-1991 of Vinayagar Engineering Works, they carried out the following operations to manufacture rolling shutters.
(1) The shutter lath sections that are brought in mill length are cut to required size and both end side MS clips are fixed by riveting and the interlocking of the section are carried out;
(2) Guide channel sections which are brought in longer lengths are cut to required size and are welded with 20 mm or 16 mm bar with MS sheet bracket. Cleats are welded to enable fixing into the wall;
(3) Bottom plate sections that are brought in mill lengths are cut to smaller lengths. Sheet metal are strengthened by using reinforced angles 35 mm x 35 mm x 5 mm thick which are rivetted to the plates. At either side of the plates a slot is made where the latches are welded for locking purposes.
12A. One more argument adduced on behalf of the appellants by the learned Consultant is that the heading 7308 covers only sections etc. prepared for use in structures. It is claimed that shutters themselves are not structures in themselves but are parts of other structures and hence the parts of shutters will be classifiable under heading 7308.
13. The whole basis of the Order-in-Original is that the sections have been "prepared for use" in shutters which it is claimed are structures.
14. This argument has been negatived, and in our opinion rightly by the learned Appellate Authority on the ground that there is no evidence that the sections under reference have been further worked out by the appellants after cold-forming; and in particular that these have been prepared for use in the manufacture of shutters, even assuming that shutters by themselves can be regarded as structures.
15. As against this the learned Appellants have claimed and the Department has not disproved that a number of operations have to be carried out on the cold-formed sections manufactured by the appellants such as bending lath sections into convex shapes for being used as parts of shutters and in the case of guide channels and bottom plates, cutting them into required lengths and welding with 20 mm or 16 mm with MS sheets brackets and welding of cleats. Similarly, in the case of bottom plates section, the same are to be cut to smaller lengths and strengthened by using reinforced angles which are rivetted to the plates. Further, on either side of the plates a slot is made where the latches are welded for backing purposes.
16. Considering the evidence on record, the observations of the learned Adjudicating Authority that sections under reference have been "prepared for use in structures" as required for classification under heading 73.08 appears to be a mere "ipse dixit" not backed by any evidence.
17. In view of this there is no scope for invoking Rule 3 of the interpretation Rules on the ground that it provides a more specific description than the heading 72.16.
18. For the above reasons, we uphold the Order-in-Appeal and reject the Appeal of the Department.