Customs, Excise and Gold Tribunal - Ahmedabad
Cce vs Krishna Industries on 13 November, 2006
Equivalent citations: 2007(208)ELT191(TRI-AHMD)
ORDER C.N.B. Nair, Member (J)
1. The Respondent M/s. Krishna Industries is a manufacturer of "domestic milk cans". These cans varied in capacity from 5 ltrs, to 50 ltrs. The respondent claimed classification of cans under Central Excise Tariff heading No. 73.23, with the benefit of exemption under Notification No. 5/99 (Srl. No. 201).
2. Show cause notice dated 29.12.99 was issued contending that cans in question are not household article, and therefore, cannot be classified under heading 73.23. The ground taken in the notice was that these cans cannot be taken as household items. The notice also pointed out that such cans are generally not used in household, but in dairy industry.
3. The respondent contested the notice; but in vein. In adjudication the Asst. Commissioner noted that the item is used in dairy industry and that it is not for household use. A view was taken that "while 5 ltr. and 10 ltr. (taking larger view of kitchen and domestic), can be considered as domestic milk cans, anything larger than that cannot be considered as domestic cans." The view was that larger cans can be treated as for industrial use. Thus, 'capacity' was the main criterion in passing the adjudication order.
4. The respondent took up the matter before the Commissioner (Appeals) contending that classification of cans, whether under 73.10 or 73.23 is not to be based on capacity of the cans; but based on whether they are for household use or not. Reliance was placed on HSN notes.
5. The Commissioner (Appeals) accepted the respondent's contention and allowed its claim for classification as well as exemption. He noted that, according to HSN Note, heading 73.23 included items used in Hotels, Restaurants, Boarding Houses, Hospitals, Canteens and Barracks, etc. Therefore, capacity cannot be the criterion. He also noted that for Sales Tax purposes the same item was being treated as household item. The present appeal of the Revenue is directed against that order.
6. We have perused the record and heard both sides at length. The Rival tariff headings may be read first:
7310.00 Tanks, casks, drums, cans, boxes, and similar containers, for any material (other than compressed or liquefied gas), of iron or steel, of a capacity not exceeding 300 L, whether or not lined or head-insulated, but not fitted with mechanical or thermal equipment.
73.23 Table, kitchen or other household articles and parts thereof, of iron or steel; iron or steel wool; pot scourers and scouring or polishing pads, gloves and the like of iron or steel.
HSN Note to 73.23 states that Table, Kitchen or other House hold article includes goods for use in hotels, restaurants, boarding-houses, hospitals, canteens, barracks, etc. From this it is clear that capacity cannot be the basis for classification (as done under the adjudication order) as items used in hotels etc. would not be of small capacity. Note also specifically states that heading covers "domestic milk cans". It is significant that milk cans do not find any mention under heading 73.10, while they are specifically mentioned under 73.23. That heading speaks of cans in general. Thus, 73.23 is specific for milk cans. The distinction between milk cans covered under 73.23 and cans covered under 73.10 is made clear by the following note under heading 73.10.
The larger containers covered by this heading include tar or oil drums; petrol cans; milk churns; casks and drums for alcohol, latex, caustic soda, calcium carbide, dyestuffs or other chemicals. The smaller containers include boxes, cans, tins, etc., mainly used as sales packings for butter, milk, beer, preserves, fruit or fruit juices, biscuits, tea, confectionery, tobacco, cigarettes, shoes cream, medicaments, etc.
7. From the above note, it is clear that cans covered under 73.10 are cans used for packing and serving canned products and not cans used for the repeated handling of milk and other products.
8. That capacity is not the criterion for classification is also clear from Sub-heading in heading 7310.10 in HSN. Sub-heading 7310.10 has specific entries for "of a capacity of 50 ltrs. or more" and of a capacity of less than 50 ltr." If the scheme (sic) was to classify higher capacity cans under heading 73.10 and lower capacity cans as household articles under 73.23, all cans of less than 50 ltrs. would not find mention in 73.10.
9. It is also seen that this Tribunal, in the case of Laxmi Narayan Metal Industries v. CCE, Ahmedabad, reported in 1999 (109) ELT 518 (Tribunal) has taken the view that vessels used elsewhere than in household would also fall in the category of utensils.
10. In view of what is stated above, we are of the view that the Commissioner was right in ordering the classification for milk cans under heading 73.23 and in extending the exemption. The present appeal which challenges that view has no merit and is rejected.
(Dictated & pronounced in the Open Court.)