Customs, Excise and Gold Tribunal - Bangalore
The Commissioner Of Central Excise And ... vs Rubco Haut Woods (P) Ltd. on 27 November, 2006
ORDER T.K. Jayaraman, Member (T)
1. These appeals have been filed by Revenue against the Orders-in-Appeal Nos. 125 & 126/2004 dated 14.06.2004 passed by the Commissioner of Customs & Central Excise (Appeals), Cochin.
2. The respondents are manufacturers of furniture/furniture parts. The issue in the present appeals relate to the classification of Finger Jointed Edge Glued Panels(FJEGP) and Laminated Square Beam (LSB). The claim of the respondent is classification under sub-heading 4403.00 which reads as:
Wood, sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or finger-jointed, or a thickness exceeding 6 mm.
However, Revenue contended that the items would be classified as Articles of Wood, not elsewhere specified under 4410.90 as "Other". The said classification meant payment of duty at the rate of 4% adv. without CENVAT or @ 16% adv. with CENVAT, vide Notification No. 10/2002 dated 01.03.2002. The lower authority, after detailed examination of the issue, came to the conclusion that the items are correctly classified under 44.03 and thereby dropped the demands. Revenue filed an appeal to the Commissioner(Appeals) contending that the proper classification would be under 4410.90. The main ground for appealing against the decision of the Commissioner (Appeals) is that the appellants in the present case, have undertaken certain processes other than planing, sanding or finger jointing and by virtue of HSN Notes, they would not fall under HSN heading 44.07, which corresponds with the Excise classification 44.03. The Commissioner (Appeals), after a very detailed examination, has not accepted the contention of the Revenue and upheld the order of the lower authority. The Revenue is aggrieved over the impugned orders of the Commissioner (Appeals). Hence, they have come before us to set aside the impugned orders and classify the goods under 44.10 on the following grounds:
The HSN notes has explained the process of finger-jointing as "process whereby shorter pieces of wood are glued together end to end with joints resembling interlaced fingers, in order to obtain a greater length of wood." On reading of HSN general notes of Chapter 44 and notes under sub-heading 4407 (which corresponds to GET heading 4403) it become obvious that (with few exemptions) wood or timber sawn chipped, sliced, peeled, planed or timber has undergone any process other than planing, sanding or finger jointing then it would go out of HSN heading 4407(CET 4403): This is clearer from the HSN Notes under heading 4409 wherein it is explained that if they have not been worked beyond planing, sanding or end joining then they would fall in heading 4407. Moreover products like wood roughly squared, chip wood, veneer sheets for plywood, wood continuously shaped along any of its edges or faces, strips of plywood, builder's joinery and carpentry excluded from this heading as per HSN explanatory notes and the two products FJEGP and LSB which are lacquered and laminated are akin to the goods described under HSN heading 44.18 "Builders joinery and carpentry". The said products are manufactured goods and are distinct from ordinary wood/timber. The heading 44.10 reads "Articles wood not elsewhere specified." Article means "a piece of goods or property", "commodity" "any useful thing: or any article of commerce." These definitions obviously apply to the two products FJEGP and LSB.
3. Shri Anil Kumar, the learned JDR, appeared for Revenue and Ms. Pushya Sitaraman, the learned Advocate, appeared for the respondents.
4. While the JDR reiterated the grounds of appeal, the learned Advocate brought samples of the item and explained the manufacturing process. She has urged the following points:
(i) There is nothing in the HSN Notes to come to the conclusion that the processes such as edge-gluing or lamination would take the items out of the purview of 44.03.
(ii) Something can be classified as Article of Wood only if it is a finished product made out of wood.
(iii) In the case of Andaman Timber Industries, the same issue was raised in 1998 and the Assistant Commissioner, in his order dated 28.04.1999, held that FJEGP and LSB would fall under 44.03. The Show Cause Notice was dropped. Revenue has accepted the same and the Commissioner has neither reviewed the orders nor filed any appeal. As per the HSN, the following Articles of Wood are listed.
(i) Wooden frames
(ii) Packing cases, boxes, etc.
(iii) Casks, barrels, etc.
(iv) Tools, tool bodies, handles etc.
(v) Table ware & kitchenware of wood
(vi) Jewel boxes, statues etc.
5. We have gone through the records of the case carefully. After seeing the samples, we are not impressed with the Revenue's argument that the items are Articles of Wood. We agree with the lower authorities that an Article of Wood is an end product. Both the lower authorities have examined the issue in depth. The Commissioner (Appeals) has brought out the HSN Explanatory Notes in para 11 of his order and has stated that nowhere the Explanatory Notes preclude classification of such wood under this heading if it is subjected to the process of gluing, edge-wise or face-wise. Further, on reading the Tariff description under 44.03, one cannot come to the conclusion that if the wood is subjected to processes other than sawing, chipping lengthwise, slicing or peeling, the resultant product would go out of 44.03. Both the orders of the lower authority are well reasoned and we do not find any merit in these appeals. Therefore the Revenue's appeals are dismissed by upholding the impugned orders.
(Pronounced in open Court on 27 Nov. 2006)