Customs, Excise and Gold Tribunal - Delhi
Associated Strips Pvt. Ltd. vs Collector Of Central Excise on 21 June, 1990
Equivalent citations: 1991ECR301(TRI.-DELHI), 1990(49)ELT596(TRI-DEL)
ORDER K.S. Venkataramani, Member (T)
1. The Misc. application is for seeking to amplify and to amend certain grounds of appeal, and on a consideration of the proposed amplification and amendment, and on hearing both the parties in the matter, the Misc. application was allowed.
2. This appeal is directed against the order dated 30-9-1988 passed by the Collector of Central Excise, New Delhi by which he demanded duty of Rs. 10,93,638.60 in respect of steel tabular poles/electric poles for the period 1-4-1985 to 30-9-1985. The appellants herein manufacture steel tabular poles falling under Item 68 of Central Excise Tariff. The goods were considered to be falling under Item 26AA(iv) of Central Excise Tariff and are exempted from duty under Notification 69/73 till 1982 when doubt was expressed about the classification of the item and the department initiated adjudication proceedings by issue of show cause notice dated 18-12-1982 seeking to classify the item under Tariff Item 68 and raising a demand for short levy for the period 1979-80 to 8-11-1982. Ultimately, the Collector adjudicated the case by his order dated 4-9-1984 and held that steel welded tabular poles were classifiable under Tariff Item 26AA(iv) as pipes and tubes and dropped the proceedings. However, subsequently proceedings were started afresh by a notice dated 17-10-1985 for the goods cleared in the period 1-4-1985 to 30-9-1985 asking the appellants to show cause as to why the duty should not be recovered under Section 11A on the goods. The appellants contested the demand for duty and pointed out that the show cause notice was without jurisdiction as the issue had already been decided by the earlier order of the Collector dated 4-9-1984 and no review of that decision has been ordered. The Collector of Central Excise, ultimately, decided the case by impugned order which is presently under appeal. The Collector (Appeals) held in that order that the product manufactured is not classifiable as pipes and tubes, but would fall under residuary Item 68-CET and in coming to this conclusion, he also followed the CEGAT decision in the case of Indian Metal & Ferro Alloys Ltd. v. Collector of Central Excise, Bhubaneswar reported in 1985 (21) ELT 548, and confirmed the demand.
3. Shri K. Narasimhan, the learned counsel with Shri Lachman Dev, the learned consultant, appeared for the appellants. The learned counsel pointed out that the Collector's order overlooked a major development in the tariff description in respect of iron & steel entries in the tariff. These changes were made in the tariff by the Finance Act, 1983 which were given effect to from 1-8-1983. By these changes, Tariff Item 25 of Central Excise Tariff was comprehensively revised to cover all products falling in the pre-existing Tariff Items 25,26,26AA and 28, and as a consequence of which, the latter three items were deleted. The learned counsel pointed out that the Finance Minister, while introducing the Finance Bill, 1983, made certain observations explaining the change in the tariff relating to iron and steel items, which was to the effect that the changes were made in order to align the Central Excise Tariff, as far as these items were concerned, with the Indian Customs Tariff. The learned counsel submitted that the Indian Customs Tariff largely followed Brussels Tariff Nomenclature (BTN) which, therefore, can be looked into with its Explanatory Notes. The Explanatory Note to Heading 73.18 of BTN makes it clear that tubes will remain classified within this heading whether they are straight or curved (including coiled tubing), and or wall thickness (e.g. locally expanded tubes and stepped tubes). The electric poles manufactured by the appellants are tubes of varying diameters and as such are stepped tubes, and such tubes by whatever name marketed, will be covered by the Tariff Item 25(15)-CET which is aligned to corresponding Customs Tariff Heading 73.17/19, because stepped tubes do not lose their essential characteristics of tubes and pipes and will be covered by Customs Tariff Heading 73.17/19 as well as Central Excise Tariff Item 25(15). The counsel further contended that the decision of the CEGAT on which the Collector had relied, has been in the context of interpretation of old Tariff Item 26AA(iv) which was deleted by the Finance Act of 1983 and replaced by Tariff Item 25(15). The counsel further submitted that the show cause notice was issued on 17-10-1985 and it could be valid to demand duty only for 6 months earlier to that date. The duty demanded for the period 1-4-1985 till 16-4-1985 cannot in any event, be sustained in law and hence, is liable to be deleted as being barred by limitation.
4. The learned SDR Shri Tayal appearing for the department contended that the change in the tariff brought out by the Finance Act, 1983 would not make any material difference to the case, and pointed out that in the unamended Item 26AA of Central Excise Tariff, the description was pipes and tubes (including blanks therefor) all sorts, whereas this description was modified and restricted under Item 25(15) of Central Excise Tariff after the amendments when the words 'all sorts' had been deleted from the tariff description, and because of this restricted meaning given to the tariff entry, the electric poles manufactured by the appellants cannot fall within the purview of the tariff description under Item 25(15)-CET. As regards the relevance of the Explanatory Note to BTN, the learned SDR urged that even according to the Explanatory Notes, the appellant's case is not advanced, and drew attention to the Explanatory Note to Heading 73.18 at page 1010 at sub-para (3) which says that tubes and pipes made up into specific identifiable articles are excluded from the heading, and since the poles manufactured are identifiable as electric poles for transmission of electricity, they will not fall under Heading 73.18 as pipes and tubes. The learned SDR also contended that the ratio of the decision of the CEGAT relied upon by the Collector was still relevant because of the restricted scope of the amended Item 25(15)-CET deleting the words 'all sorts' as mentioned above. He also relied upon the Supreme Court decision reported in 1987 (13) ECR 273 to say that in that case the Supreme Court held that bearings and component having similar function cannot be classified together. Therefore, here also, the electric poles cannot be considered as pipes and tubes as their functions are different. On limitation, the learned SDR pointed out that the relevant date is the finalisation of the date of RT. 12 returns and accordingly, the time bar would apply only to the dates between 1st and 7th of April.
5. We have carefully considered the submissions made by the learned counsel and the learned SDR. It is observed that the order of the Collector dated 4-9-1984 is itself under challenge before the Tribunal by the Department in Appeal No. E/2578/85-B.l. In this appeal, the period involved is one subsequent to the amendment of the tariff item relating to iron and steel and the insertion of Tariff Item 25(15) relating to tubes and pipes. It has been contended that after this amendment, the effect was the alignment of these items with the Customs Tariff Act which is largely based on BTN and that, therefore, the Explanatory Note to BTN against Heading 73.18 can be looked into which shows that stepped tubes are included under that heading. However, it is seen that in the amendment, the words 'all sorts' occurring in Tariff Item 26AA(iv) had been deleted, which means that Item 25(15)-CET after amendment, was restrictive in respect of pipes and tubes, as against the Item 26AA(iv) before amendment, which covered pipes and tubes (including blanks therefor), all sorts. It has been stated that the poles are in the nature of stepped poles having varying diameters welded together. The processing involved is welding of pipes of different diameters one above the other in a vertical position at two steps to make it welded stepped poles as is given in the Collector's order dated 4-9-1984 accepted by the appellants, which is available on record. It is also seen that the lower portion is painted with Bitumen and the upper portion with red-oxide, MS cap welding at the top and the base plate welding at the bottom. It was also found that some of the goods were given a curve at about 4 to 5 below from upper end which is generally done for holding fluorescent tubes. The above processes would show that the goods are not in the shape of pipes and tubes, as they are given certain shape, like bending at the top for holding the tube, cap and base plate welded as well as painting of the top and bottom with red oxide and bitumen, and on this basis, the goods will no more resemble pipes and tubes, because the goods have been made into identifiable articles, namely, electric poles for lighting and transmission of electricity. Pipes and tubes, even according to the Explanatory Notes to Heading 73.18 of BTN, are those put to use for e.g. as pipelines for oil, water, gas, steam, etc.; as conduits for electric wiring in the manufacture of furniture, machinery, boilers, bearing races, automobiles, cycles and perambulators. Although it has been stated that stepped tubes will also remain classified under this heading, yet we have to note that the goods are not merely stepped tubes as they were subjected to other processes such as the bending at the top for holding the tube, welded with the base plate and cap and protective painting at bottom and top, all designed for the purpose for which the electric poles are manufactured, which are not necessary for the function of pipes and tubes as given in the Explanatory Notes to the Heading 73.18. In these circumstances, the stepped electric poles manufactured after the amendment of the tariff and insertion of Item 25(15) in the Central Excise Tariff will not be classifiable under that item because of its restrictive scope, as already pointed out above, and because the stepped electrical poles have definite design and are made up into poles for electric lighting/transmission and cannot be considered as pipes and tubes as such, covered by the scope of the item as indicated in the Explanatory Note to Heading 73.18. The goods will correctly fall under Tariff Item 68-CET. It is held accordingly. As regards the time bar, the demand would be valid only for the period of 6 months prior to the receipt of the show cause notice by the appellants, as contended by the appellants, as the case will be covered by the relevant date on which the duty is to be paid as given in sub-para (c) of para (ii) defining relevant date for the purpose of Section 11A of the Central Excises and Salt Act, 1944. The appeal is disposed of in the above terms.