Customs, Excise and Gold Tribunal - Delhi
Calcutta Steel Industries vs Collector Of Central Excise on 20 December, 1990
Equivalent citations: 1991(54)ELT90(TRI-DEL)
ORDER V. Rajamanickam, Member (T)
1. Out of above 164 Appeals, 10 Appeals from S.No. 154 to 163 have been filed by the Department and the issues involved in respect of 106 Appeals pertain to the period from 01-08-1983 to 29-02-1988 and the remaining 56 Appeals pertain to the period from 01-03-l988 onwards. On an identical issue, M/s. Ajanta Steel Corporation have filed an Appeal in E/Appeal No. 2784/89-B1 and the Department has also filed an Appeal against the Order of the C.C.E.(Appeals) in E/Appeal No. 2792/89-B1. All the Appeals pertain to the orders passed by the Collector of Central Excise (Appeals) in respect of classification of the products of Iron and Steel as per the Tariff prevailing during the relevant periods. The issues involved in all the appeals being common are taken up for issue of a consolidated common order.
2. During the period from 01-08-1983 to 27-02-1986, the Tariff Item 25 covered Iron and Steel, and products thereof, definitions of the various products among others, viz. Hoops, Strips, Flats and Bars were incorporated.
For the period from 01-08-1983 to 27-02-1986, under the revised Central Excise Tariff Act, 1985, Chapter 72 was introduced, and the definitions were incorporated verbatim as Chapter notes.
From 01-03-1988, Chapter 72 was further revised with Chapter notes containing broad description of "Flat Rolled Products" and definitions of such products were incorporated under the Tariff sub-headings, the categories of products like - Hoops, Strips, Flat were listed, but no statutory definition for these items were given. The bone of contention between the assessee and the Department is to determine the category under which these items should be classified.
3. The main issues involved are that the Appellants are having an Iron and Steel Re-Rolling Mill which is commonly known as Section/Merchant Mill. The products manufactured have a thickness: (a) less than 3mm and width below 75mm, (b) thickness less than 3mm and width above 75mm, (c) thickness 3mm and above but less than 5mm.
These issues date back to the period even prior to 01-08-1983 when the manufacturers have been agitating that their products of Section/Bar Mill do not have controlled contour, rectangular, cross-section or rolled/slitted or sheared edges and merited classification as 'Bar' under the then Tariff Item 26AA(ia) of the erstwhile Central Excise Tariff and did not qualify for assessment as Flats, Strips, Hoops or Sheets, which are products of sophisticated Strips/Flat/Sheet mills and during the period when no descriptions were available, the Central Board of Excise and Customs had been issuing instructions from time to time, the difficulty in classification arising due to the over-lapping physical dimensions of these products, under Tariff Advice 4/67 dated 08-06-1967 and Tariff Entry No. 78/75 dtd. 01-06-1975, and these instructions were further modified and thereby the classification of the products became a controversial issue in classifying the products as Bar, Strip or Hoop by the Departmental officers. The Tribunal in its order reported in 1987 (30) E.L.T. 527 had held the product as a 'Bar'.
With effect from 28-02-1986, the Chapter heading 72 and 73 covered Iron and Steel products and statutory definitions already in existence during the period when Tariff Item-25 was in existence were incorporated and the decision of the Tribunal holding their products to be a Bar before and after 28-02-1986 should prevail. But, however, their Classification List was not approved by the Assistant Collector for classification under 'Bar', and their products having thickness less than 3mm and width below 75mm were classified as Hoops under Heading 7211.10, those having thickness less than 3mm and width 75mm and over as Strip under Heading 7211.39 and those having thickness less than 5mm as Flats under Heading 7209.10. In Appeal before the Collector (Appeals), the Order of the Assistant Collector was upheld.
Therefore, in these batch of appeals relating to the period from 01-08-1983 to 29-02-1988, the Appellants claim that the decision of the Tribunal in 1987 (30) E.L.T. 527 for classification of their products as 'Bar' under Tariff Item 26AA(ia) of the erstwhile Tariff should be made applicable, as the Tribunal had taken into consideration the definitions contained in the revised Tariff Item 25.
The Appellants contend that definitions of Strips, Hoops, Flats contained in the Tariff Item 25, have been verbatim incorporated in Chapters 72 and 73 of the Central Excise Tariff Act and the ratio of the Tribunal's decision in the classification of the products should be adopted in respect of the disputed items. According to the definitions statutorily provided under Chapter 72 of the Central Excise Tariff Act, 1985, their product is not a Strip, Flat, Hoops. The definition of these is as follows :-
(a) STRIPS:
Hot or cold-rolled products, rolled approximately in rectangular cross-section, of thickness usually 10 millimetres and below with milled rolled, trimmed or sheared edges and supplied in coil or flattened coil(straight length) form but excludes hoop and skelp.
(b) FLATS:
Finished products, generally of rectangular cross-section, having rolled edges only (square or slightly rounded) of controlled contour and of thickness 3 millimetres and over, width 400 millimetres and below and supplied in straight lengths and includes flat bars with bulb that has swelling on one or two faces of the same edge and a width of less than 400 millimetres.
(c) HOOPS:
Hot-rolled flat products in rectangular cross-section of thickness less than 3 mm and width less than 75 mm.
But the product would be covered by the definition of Bar :-
BAR:
"The products of solid section which do not conform to the entirety of any of the definitions at (vii), (viii), (xii), (xiv), (xv), (xvi), (xvii), (xviii) and (xix) above and which have cross-sections in the shape of circles, segments of circles, ovals, isosceles triangles, rectangles, hexagons, octagons or quadrilaterals with only two sides parallel and the other sides equal."
They have further contended that the Bombay High Court in the case of Mahindra Re-Rolls Industries and Anr. v. Union of India and Ors., reported in 1988 (33) E.L.T. 684 (Bom.) have held that the product - "Flat hot-rolled product of iron and steel less than 3mm in thickness and less than 125mm in width not rectangular in cross-section but uneven in shape, size and length with no shearing of the edges and not coiled" was classified under Item 26AA(ia) of the Central Excise Tariff Act.
The Hon'ble Supreme Court has rejected the appeal filed by the Department against the Tribunal's Order reported in 1987 (30) E.L.T. 527 and upheld the classification as Bar. Therefore, the order of the Collector(Appeals) has to be set aside.
4. The Appellants have further appealed against the orders of the Collector (Appeals) for the period from 01-03-1988 which involves the classification dispute on the revised Chapter 72 as to where their product will fit in.
In their Memorandum of Appeal in this set of appeals apart from pointing out the position as it existed prior to 01-03-1988, the grounds of appeal as set forth in the earlier set of appeals has been reiterated. In addition, the Appellants have pleaded that :-
"The department took the said product of the appellant as 'Flats' under the category 'Flat Rolled product' instead of BAR under the category 'other Bars and Rods' under the revised Chapter 72, even though such product of the appellant neither qualify for classification as 'Flat Rolled Products', nor as 'Flat' in view of the statutory definition provided for 'Flat Rolled Products' as per Note 1(K) of the revised Chapter 72. The definition given therein of 'Flat Rolled Products' reads as follows :-
"Rolled products of solid rectangular (other than square cross-section, which do not conform to the definition at (ii) above in the form of :-
- coils of successively superimposed layers, or - straight lengths, which if of a thickness less than 4.75mm are of a width measuring at least ten times the thickness or if of a thickness of 4.75mm or more are of a width which exceeds 150mm and measures at least twice the thickness.
Flat rolled products include those with patterns in relief derived directly from rolling (for example, grooves, ribs, chequers, tears, buttons, lozenges) and those which have been perforated, corrugated or polished provided that they do not thereby assume the character of articles, or products of other headings.
Flat-rolled products of a shape other than rectangular or square, of any size are to be classified as products of a width of 600mm or more, provided that they do not assume the character of articles or products of other headings."
The definition of Flats, Hoops and Strips,have not specifically been provided in the revised Chapter 72 which came into force with effect from 01-03-1988. The statutory definitions which were prevailing prior to revision of Chapter 72 will have to be taken for classifying a product as Hoops, Flats or Strips. The statutory definitions prior to 1-3-1988 of Flats, Hoops and Strips were as follows :-
(a) FLATS Finished products, generally of rectangular cross-section, having rolled edges only (square or slightly rounded), of controlled contour and of thickness 3mm and over, width 400mm and below and supplied in straight lengths and includes flat bars with bulb that has swelling on one or two faces of the same edge and a width of less than 400mm.
(b) HOOPS:
Hot-rolled flat products in rectangular cross-section of thickness less than 3mm and width less than 75mm.
(c) STRIPS:
Hot or cold-rolled products, rolled approximately in rectangular cross-section, of thickness usually 10mm and below, with milled, rolled, trimmed or sheared edges and supplied in coil or flattened coil (straight length) form but excludes hoops and skelp.
The appellant submitted Classification List effective from 1-3-1989 claiming therein their products of non-alloy steel and that of alloy steel, not further worked than hot rolled, produced in a Bar Mill, of uneven thickness and uneven width, as Bar covered under heading 7214.90 and 7226.91 respectively. The local Central Excise authorities issued Show Cause Notices calling upon the appellants to Show Cause as to why their products should not be classified as 'Hoops', 'Strips' or 'Flats' depending upon their thickness and width. The appellant submitted reply to the said Show Cause Notices as per Annexure and also made further submissions at the time of Personal Hearing.
The Assistant Collector, Central Excise, Patiala/Ludhiana, the adjudicating officer, adjudicated the cases as per his Order-in-Original classifying the product stated in Col. 2 as those stated in Col. 3 against the claim of the appellant stated in Col. 4 in the Table below :-
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SL. No. Description of the Classified by Appellants' claim for
goods Asstt. Collr. Classification.
under sub-
Heading No.
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1. Flat products of Flat rolled Under S.H. 7214.90 as Other thickness less than products under bars and rods' of non alloy 3mm and width less S.H.7211.30 as steel than 75mm. 'Hoops'.
2. Flat products of Flat rolled -do-
thickness less than products under
3mm width above SH.7211.59 as
75mm. 'Strips'.
3. Flat products of Flat rolled -do-
thickness 3mm width products under
less than 400mm. S.H.7211.19 as
'Flats.'
4. Flat products of Flat rolled -do-
thickness above 5mm products under
width less than S.H.7211.11 as
600mm. 'Flats'.
5. Flat products of other Flat Rolled Under S.H. 7228.30 as
alloy steel of width products under "Other bars and rods of
less than 600mm not S.H. 7226.91 as other alloy steel'.
further worked than 'Flats',
hot rolled and thick-
ness less than 5mm.
6. Flat products of other Flat rolled -do
alloy steel of width products under
less than 600mm not S.H. 7226.91 as
further worked than 'Flats'.
hot rolled and thickness
above 5mm.
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The appellant feeling aggrieved with the said Order-in-Original filed appeal before the Collector of Central Excise (Appeals), New Delhi, who has rejected the appeal of the appellant as per Order-in-Appeal."
The Appellants mention that the learned authorities below have failed to appreciate that revised Chapters 72 and 73 came into force w.e.f. 1-3-1988. The Chapter Notes 1(K) of the revised Chapter 72, define 'Flat Rolled Products' as follows :-
"Rolled products of solid rectangular (other than square) cross-section, which do not conform to the definition at (ii) above in the form of :-
- coils of successively superimposed layers, or - straight lengths, which if of a thickness less than 4.75mm are of a width measuring at least ten times the thickness or if of a thickness 4.75mm or more are of a width which exceeds 150mm and measures at least twice the thickness.
Flat rolled products include those with patterns in relief derived directly from rolling (for example grooves, ribs, chequers, tears, buttons, lozenges) and those which have been perforated, corrugated or polished, provided that they do not thereby assume the character of articles or products of other headings. Flat rolled products of shape other than rectangular or square, of any size are to be classified as products of a width of 600mm or more, provided that they do not assume the character of articles or products of other headings."
Flat-rolled products, covered under Heading 7211 had further been divided into various categories such as 'Flats' exceeding 5mm thickness covered under Heading 7211.11 and those of thickness 5mm and below under Heading 7211.19; 'Hoops' under Heading 7211.13; 'Strips' (Cold-rolled) under Heading 7211.51; 'Strips' (Hot-rolled) exceeding 5mm in thickness under Heading 7211.52 and other strips under Heading 7211.59 etc. The definitions of Flats, Hoops and Strips have not statutprily been provided in the revised Chapters 72 or 73. The definitions which were prevailing under the super-ceded Chapter 72 will have to be taken for classifying a product as "Flat", "Hoop", or "Strip". Statutory definitions prior to 1-3-1988 of 'Flats, 'Hoops' and 'Strips' were as follows :-
(a) "FLATS:
Finished products, generally of rectangular cross-section, having rolled edges only (square or slightly rounded), of controlled contour and of thickness 3mm and above, width 400mm and below and supplied in the straight lengths and includes flat bars with bulb that has swelling on one or two faces of the same edge and a width of less than 400mm.
(b) HOOPS:
Hot rolled flat products in rectangular cross-section of thickness less than 3mm and width less than 75mm.
(c) STRIPS:
Hot or cold-rolled products, rolled approximately in rectangular cross-section, of thickness usually 10mm and below, with milled, rolled, trimmed or sheared edges and supplied in coil or flattened coil (straight length) form but excludes hoop and skelp."
In view of the said statutory provisions, the products produced by the appellant of uneven thickness and uneven width, having neither rectangular cross-section nor rolled edges of controlled contour, could not be classified as 'Flat' covered under Heading 7211.11 because to qualify as 'Flat' it should be generally of rectangular cross-section having rolled edges only (slightly rounded) of controlled contour, of thickness 3mm or over, width 400mm or below. The products of the appellant as admitted by the adjudicating officer is of uneven thickness and uneven width and do not have rolled edges of controlled contour. Such a product does not qualify the definition of 'Flat'. The Order-in-Original classifying such product as 'Flat' and the Order-in-Appeal upholding such classification are basically erroneous and merit to be set aside.
That the authorities below have also failed to appreciate that the appellant had a small re-rolling Section/Bar Mill. Such mill can neither produce a product of rectangular cross-section nor there was any arrangement for rolling, slitting or trimming of edges. There was also no arrangement for producing products of controlled contour. The products of the appellant had uneven thickness and uneven width, as admitted by the said Adjudicating Officer. Such products also do not qualify for classification as 'Flat Rolled Products' in view of the statutory definition provided for 'Flat Rolled Products' under Note 1(K) of the revised Chapter 72 which covers products of rectangular cross-section only and also when the said definition specifically excludes products of a shape other than rectangular or square of any size which have assumed the character of products of other Heading. Since the products of the appellant have assumed the character of 'Other bars' under Heading 7214.90 these could not be classified as 'Flat Rolled Products' covered under Heading 7211.11 or 7211.19 as have been classified by the Adjudicating Officer under his impugned Order-in-Original. Such order being contrary to the statutory definitions, merited to be set aside. The Collector of Central Excise (Appeals) by upholding such order has committed an error and passed unjudicious order-in-appeal.
5. During his oral submissions, Shri P.S. Bedi, the Ld. Consultant, reiterated the above points and stated that as the appeals were all identical, he took up the Appeal in E/3036, as a model case and argued the case. He drew attention to the following case laws :-
(i) 1987 (30 E.L.T. 558 (Tribunal) - Calcutta Steel Industries, Mandi Gobindgarh and Ors. v. C.C.E. Chandigarh -
holding the products less than 3mm thickness and width less than 75mm are not Hoops and fall under T.I. 26AA(ia).
(ii) 1987 (30) E.L.T. 527 (Tribunal) - Steel Corporation of Punjab and Ors. v. Collector of Central Excise, Chandigarh -
steel products of thickness less than 3mm and width of 75mm or more classifiable under T.I. 26AA(ia)
(iii) 1989 (39) E.L.T. 175 (S.C.) - C.C.E. v. Calcutta Steel Industries and Ors. -
Rectangular flat product of thickness less than 3mm and width of less than 75mm classifiable as Bars under T.I. 26AA(ia) and not as Hoops under Item 26AA(ii).
(iv) 1988 (33) E.L.T. 684 (Borri.) - Mahindra Re-Rolls Industries and Anr. v. U.O.I. and Ors. -
Iron and Steel products - Flat hot-rolled product of iron and steel less than 3mm in thickness and less than 125mm in width not rectangular in cross-section but uneven in shape, size and length with no shearing of the edges and not coiled -Test report on stray sample without showing date thereof and copy not furnished to assessee not acceptable - Classification of the product under Item 26AA(ia) of Central Excise Tariff upheld.
In respect of the Appeal in M/s. Ajanta Steel Corporation, Shri K.K. Patel, Ld. Advocate, stated that his arguments will be the same as those advanced by Shri P.S. Bedi.
6. In reply, Shri L.P. Asthana, Ld. Jt. C.D.R. stated that after introduction of the Tariff definitions the criteria for deciding the classification on trade parlance becomes irrelevant. The earlier decisions of the Tribunal in the absence of definitions went by the Mill in which the products were manufactured and the dimensional aspects were not considered. But with effect from 1-3-1988, the Chapter Notes for the definitions for flat-rolled products have to be read with the Chapter Heading. He relied on the following case laws :-
(i) 1986 (25) E.L.T. 473 (S.C.) - Atul Glass Ltd. and Ors. v. C.C.E. and Ors.;
(ii) 1983 (13) E.L.T. 1607 (S.C.) -Porritts and Spencer (Asia) Ltd. v. State of Haryana, Paras 4 & 5;
(iii) 1990 (45) E.L.T. 490 (Tribunal) - C.C.E. v. ESKAYEF Ltd. Paras: 8.2 & 8.3;
(iv) 1988 (37) E.L.T. 480 (S.C.) - C.C.E. Kanpur v. Krishna Carbon Paper Co.;
(v) 1981 (8) E.L.T. 325 (S.C.) - Indo-International Industries v. Commissioner of Sales-Tax, U.P. "Interpretation - Tariff entries in Central Excises Act and Sales Tax Act -It is well settled that in interpreting the Tariff entries in statutes like the Excise Tax Acts and Sales Tax Act, the primary object is to raise revenue for which diverse products, articles and substances have to be classified. Therefore, unless the term and expression has been defined in the statute itself, it should not be understood in the scientific and technical sense but in the popular sense that is to say in the sense in which it is understood by those dealing in them."
(vi) 1990 (46) E.L.T. 34 (Bom.) - Garware Synthetic Bristles Pvt. Ltd. v. U.O.I. -
Classification of goods or demand - Solely based on Tariff Advice or Trade Notice not permissible,
(vii) 1985 (20) E.L.T. 222 (S.C.) - Khandelwal Metal & Engineering Works and Anr. etc. v. U.O.I. and Ors., Paras 31 to 35.
(viii) 1987 (29) E.L.T. 975 (Tribunal) - Collector of Customs, Bombay v. Hargovind Das & Co., Para 28.
(ix) 1990 (47) E.L.T. 161 (S.C.) - Akbar Badruddin Jiwani v. Collector of Customs, Paras 36 to 46 and 53.
(x) 1983 (13) E.L.T. 1566 (S.C.) - Dunlop India Ltd. & Madras Rubber Factory Ltd. v. U.O.I. and Ors. -Classification of goods - Article classifiable under specification cannot be classified under residuary item (Para 37).
(xi) 1990 (45) E.L.T. 525 (S.C.) - Bharat Forge & Press Industries (P) Ltd. v. Collector of Central Excise.-
Classification of goods under residuary - Criteria, (Para 3).
(xii) 1987 (28) E.L.T. 318 (Tribunal) - Macneill & Magor Ltd., Calcutta-I v. Collector of Customs, Calcutta.
It was also contended by the Ld. Jt. C.D.R. that the Assistant Collector has in his order made the following classifications as per the dimensions and definitions, and Bar being a residuary entry, it was not applicable :-
(i) Flat product with thickness less than 3mm and width below 75mm under Tariff Heading 7211.10 as Hoops;
(ii) Flat product with thickness less than 3mm and width 75mm and over as Strip under Heading 7211.39.
(iii) Flat product with thickness 3mm and over but less than 5mm as flat under Heading 7209.10 as flats.
These classifications have been upheld by the Collector (Appeals). That in commercial parlance these are known by the above mentioned terms and cases cited as delivered by Tribunal or Bombay High Court are "in personam and not in rent" and individual cases have to be decided on merits.
7. After the period 28-02-1988 from 01-03-1988 onwards, the Department has filed Appeals in 10 cases wherein they disputed the Order of the Collector (Appeals) in classifying the flat-rolled product having thickness less than 3mm and width between 75mm to 200mm as Bar, while it has to be classified as 'Strips', that as per the definition of Strips, the word 'Flattened Coil' has been clarified in bracket as straight length, and therefore strips can be in coils as also in straight length and accordingly rolled products of thickness below 3mm and width above 75mm but below 200mm would be correctly classifiable as strips and not Bars and classifiable under Heading 7211.39.
8. In his rejoinder, Shri P.S. Bedi, the Ld. Consultant, in addition to the arguments that he had already advanced, stated that while bringing about the changes in the Central Excise Tariff, the Finance Minister while presenting the Annual Budget for 1983-84 in the Lok Sabha, had spoken about the entries relating to Iron and Steel products and stated that the principles of classification hitherto adopted through executive instructions were being incorporated in the Tariff Entry itself, reported in 1983 (11) E.L.T. A-87, and with no change in Legislature intent, the definition already existing should hold the field. In support of his argument he referred to the following case laws :-
(i) AIR 1957 (SC) 628 (P-631), para (C) & 7, RMD Chamarbangwala v. Union of India -
(ii) AIR 1979 (SC) 193 (P-205) - Chief Justice Andhra Pradesh v. LVA Dikshitulu "A Statute is to be constituted accordingly to the intent of them that make it."
(iii) AIR 1982(SC) 1413 (P-1419) - Prithi Pal Singh v. Union of India -
The duty of Judicature is to act upon the true intention of the legislative the mens or Sententia legis "Jurisprudence".
(iv) 1986 (26) E.L.T. 193 (SC) - Rib Tapes (India) Pvt. Ltd. v. Union of India [Paras, p-196]
(v) AIR 1966 (SC) 955 (Page-966 P.18) - Sachidananda A.C. Custom Calcutta v. Sitaram Aggrawal -
(vi) AIR 1968 (SC) 1504 (Page-1508) - Godhara Borough Municipality v. Godhara Electricity Ltd. -
"When an Indian Act is modelled on a prior English Act decisions construing the provision of the English Act are referred to as helpful guide for construing corresponding provisions of the Indian Act.
(vii) AIR 1959 (SC) 356 (Page-357) - Bhogilal Chunnilal Pandya v. State of Bombay. -
Same word same meaning "Words are generally used in the same sense throughout in a statute unless there is something repugnant in the context."
(viii) AIR 1957 (SC) 23 (Pages 26, 27) - Shamrao Vishnu Parulekar v. Distt. Magistrate Thana. -
Regard must be had of the purpose behind the particular provision and its setting in the scheme of statute.
In respect of the Appeals filed by the Department, Shri P.S. Bedi stated that the Tribunal by its Order No. 216 to 256/89-B1 dated 29-12-1989 in the case of CCE, Jaipur v. Sanchoti Synthetics (P) Ltd. and Ors. had in respect of classification of Strips, had held that they would not fall under Tariff Item 25(12) as Strip, but under T.I. 25(8) and the definition of Strips did not cover the product under dispute.
9. Smt. Vijay Zutshi, Ld. C.D.R. who was arguing for the Department, made a request for advancing some more arguments in support of the Department, the Bench permitted her to put forth her arguments. In support of the decisions of the Tribunal relied upon by the Appellants in Order No. 267 to 283/87-B dated 22-04-1987 - Steel Corporation of Punjab and Ors. v. C.C.E., Chandigarh, the Tribunal has gone by the book on U.S. Steel particulars - "The making, shaping and treating of Steel". In adopting the dimensional specifications, the Ld. Jt. C.D.R. argued that ISI Specifications should be given preference to American and British Standard Specifications. She cited the following references as applicable in support :-
(i) 1977 (1) ELT (J-199) - U.O.I, and Ors. v. Delhi Cloth and General Mills Co. Ltd. and Ors.;
(ii) 1983 (12) ELT 338 (Bom.) - Devidayal Rolling & Refineries Pvt. Ltd. v. A.V. Borkar, Supdt. Central Excise and Ors.;
(iii) 1983 (12) ELT 736 (A.P.) - Nutrine Confectionery Company Ltd. v. Asstt. Collector of Central Excise, Nellore.;
(iv) 1988 (38) ELT 169 (Tribunal) - Bhartia Electric Steel Company Ltd. v. C.C.E.;
(v) 1981 (8) ELT 829 (G.O.I.) - Govt. of India (Review Case) in Re: M/s. Bharat Heavy Electricals Ltd.;
(vi) 1981 (8) ELT 325 (S.C.) - Indo-International Industries v. Commissioner of Sales Tax, U.P.;
(vii) 1990 (47) ELT 161 (S.C.) - Akbar Badruddin Jiwani v. Collector of Customs.;
(viii) 1990 (45) ELT 490 (Tribunal) - C. C.E. v. ESKAYEF Limited.;
(ix) AIR 1975 BOM. 244 - Subhash Ganpatrao Buty and Anr. v. V. Maroti S/o Krishnaji Dorlikar and Ors.
Hence the judgment in the case of Calcutta Steel Co. appears to be per incuriam and need not be followed. This ratio has been laid down in the decision of the Hon'ble Supreme Court in 1988 (2) SCC 602 in the case of A.R. Antulay v. R.S. Nayak and Anr.
The Hon'ble Tribunal also relied upon this reasoning in the case of Bhartia Electric Steel Co. Ltd. v. C.C.E., 1988 (38) E.L.T. 169 (Tribunal). Therefore, it is amply clear that without either the statute or anything relevant having been taken into consideration while passing judgment, the judgment becomes per incuriam and need not be followed.
The criteria of the Mill in which manufactured was adopted by the Tribunal, and it by itself cannot be a determining factor as viewed by the Supreme Court in Para-4 of its decision, reported in 1989 (39) E.L.T. 175 (S.C.) in the Appeal filed by the Department against this very order of the Tribunal, which, however, was upheld.
10. We have patiently heard the lengthy discussions advanced by both the sides and considered the issues in depth. This Tribunal has to decide three sets of appeal which is taken seriatum.
(A) APPEALS RELATING TO THE PERIOD FROM 01-08-1983 TO 27-02-1986 AND 01-03-1986 TO 29-02-1988, FILED BY THE ASSES-SEES WHO ARE THE APPELLANTS :
The issue resolves on the Tariff Item 25 as it existed from 01-08-1983 to 27-02-1986 and Chapter 72 in force from 28-02-1986 to 29-02-1988. As per the Appellant, their product is classifiable under the erstwhile Tariff Item 25(9)(ii) as Bars (Others), whereas the Department has held that the product is to be classified under T.I. 25(12) (i) and 25(9)(i). The period 01-08-1983 to 28-02-1986 and for the period from 01-03-1986 to 29-02-1988, the Appellants claim entry under 7209.90 conforming to Bars and the Department has classified under 7211.10 as Hoops, 7311.39 as other hot-rolled strips and 7209.10 as flats. In order to appreciate the distinction between the disputed items, it is necessary to^see definitions of Hoops, Strips, Flats and Bars. In the Tariff Item 25 under the Explanation, these terms have been defined and for the period from 01-03-1986 to 29-02-1988 under Chapter 72 these very definitions have been incorporated for the sake of easy reference, their definitions already referred to supra, are abstracted as under :-
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PRODUCT DEFINITIONS PRIOR TO 1-8- STATUTORY DEFINITION
1983 THROUGH EXECUTIVE W.E.F. 1-8-1986 UNDER ITEM
INSTRUCTIONS VIZ. BOARD 25 OF FIRST SCHEDULE.
LETTERS C. NO.139/43/77-CX
4 Dtd. 13-4-1982 READ WITH
F.NO. 139/43/77-CX4 DTD. 17-
06-1982.
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1. 2. 3.
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HOOPS : Means a hot-rolled flat product in Means hot-rolled flat products
rectangular cross-section of in rectangular cross-section of
thickness less than 3mm and thickness less than 3mm and
width less than 75mm. width less than 75mm.
STRIPS : Means a hot and cold-rolled pro- Means hot or cold rolled pro-
duct and rolled approximately in ducts, rolled approximately in
rectangular cross-section of rectangular cross-section of
thickness usually 10mm and thickness usually 10mm and
below with mill rolled, trimmed or below with mill rolled, trimmed or
sheared edges and supplied in sheared edges and supplied in
coil and flattened coil (straight coil or flattened coil (straight
length) form but excluding hoops length) form but excludes hoop
and skelp. and skelp.
FLATS : A finished products, generally of Flats means finished products,
cross-section with edge contro- generally a rectangular cross-sec-
lled contour and of thickness 3mm tion, having rolled edges only
and over width 400mm and below (square or slightly rounded), of
and supplied in straight lengths. controlled contour and of thick
The products shall have rolled ness 3mm and over, width 400mm
edges only (square or slightly and below and supplied in
rounded). This group also inclu- straight lengths and includes flat
des flat bars with bulb that has bars with bulb that has swelling on
swelling of one or two faces of the one or two faces of the same edge
same edge and a width of less and a width of less than 400mm.
than 400mm.
BARS : Finished product of solid section Bars (including flat) and rods (in-
which may be rectangular, square cluding wire rods) means
round or half round or polygonal. products of solid section which do
The dimensions generally con- not conform to the entirety of any
form to the following :- of the definitions at (vii), (viii),
(a) Round and half-rounds- (xii),(xiii),(xiv),(xv),(xvi),(xvii),
minimum diameter form. cross-sections in the shape of
(b) Square and polygonal- circles, segments of circles, ovals,
minimum 6mm side. isosceles triangles, rectangles,
(c) Other bars i.e. products not hexagons, octagons or quadri-
covered by the definition of laterals with only two sides paral-
flat or 'Hoop'. lel and the other side/sides equal.
HOOPS: Hot-rolled flat products in rec- Not provided, but in notification
tangular cross-section of thick- definition reads as "Hoops"
ness less than 3mm and width less means hot-rolled flat products
than 75mm. in rectangular cross-section of
thickness less than 3mm and
width less than 75mm.
PRODUCTS STATUTORY DEFINITIONS STATUTORY DEFINITIONS
W.E.F. 28-02-1986 TO 28-02- UNDER REVISED CHAPTER
1988 UNDER CHAPTER 72 & 72 & 73 OF CENTRAL EXCISE
73 OF CENTRAL EXCISE TARIFF ACT, 1985
TARIFF ACT, 1985.
1. 2. 3.
STRIPS: Hot or cold-rolled products, - Not Provided -
rolled approximately in rectan-
gular cross-section, of thickness
usually 10mm and below with mill,
rolled, trimmed or sheared edges
and supplied in coil or flattened
coil (straight length) form but ex-
cludes hoop and skelp.
FLATS : Finished products, generally of - Not Provided -
rectangular cross-section having
rolled edges only (square or
slightly rounded), of controlled
contour and of thickness 3mm
and over, width 400mm and below
and supplied in straight lengths
and includes flat bars with bulb
that has swelling on one or two
faces of the same edge and a width
of less than 400mm.
BARS: Bars (including flats) and Rods Products which do not conform to
(including wire rods):- any of the definitions at (ij),(k) or
Products of solid section which do (1) above or to the definition of
not conform to the entirety of any wire which have a uniform solid
of the definitions at (vii), (viii), cross-section along their whole
(xii),(xiii),(xiv),(xv),(xvi),(xvii), length in the shape of circles, seg-
(xviii) and (xix) above, and which ments of circles, ovals, rectangles
have cross-section in the shape of (including squares), triangles or
circles segments of circles, ovals, other convex polygons. These
isosceles triangles, rectangles, products may :-
hexagons, octagons or quad- -have indentations, ribs, grooves,
rilaterals with only two sides or other deformations produced
parallel and the other sides equal, during the rolling process (rein-
forcing bars and rods);
- be twisted after rolling.
------------------------------------------------------------------------------------
While adopting the classification of each of the items, the reasoning adopted by the Assistant Collector, which has been taken note of by the Collector (Appeals) is reproduced below :-
"The Assessee's contention that their product of thickness of 3mm and over is also bar instead of flat as they have only bar mills is also irrelevant as the criteria of the nature of the mill is not relied upon in the restructured T.I. 25. The flat is a finished product generally of rectangular cross-section having rolled edges which may be square or slightly rounded and of thickness 3mm and over and width 400mm and below and supplied in straight length and includes flat bar with bulbs that has swelling on one or two faces of the same edge and a width of less than 400mm. The expressions underlined herein are of immense; importance in rejecting assessees' contention that their product (which the department say as 'flat') having slightly varying (very nominal variation of one mm of fraction thereof) width as per them making the product as not having rectangular cross-section. The variation of one mm of fraction thereof is not discernible prima facie to the eyes. The microscopic variation of width does not take away the rectangular shape or rectangular cross-section of the product, namely, flat. In the definition of flat, the words generally of rectangular cross-section and edges of square or slightly rounded edge are again very pertinent and important for classification. According to it even the flat product with slightly rounded edges is 'flat'. This element is slightly round edges allow the product to be termed as flat product having rectangular cross-section. Though according to the assessee, it does not conform to the precise geometrically proportion of the cross-section area having right angles on all the four corners/edges."
For the period from 01-03-1986 to 29-02-1988, in approving the Classification List the following is the analysis :-
"I have examined the case and it is observed that the three flat product in question do not fall in the category of Bar under Heading 7209.10 and 7211.10 and 7211.39. As per definition of Hoops, it is not a rolled flat product in rectangular cross-section of thickness less than 3mm and width less than 75mm. The product of the party with this dimension do not at all attract classification bar and is rightly classifiable as Hoops.
The flat product with thickness less than 3mm in thickness and width over 75mm is classifiable as strips as it is supplied in flattened coil and has approximately rectangular cross-section. The words approximately rectangular cross-section are very important to determine its classification as strip. It is with mill rolled edges. It is immaterial of the strips do not have trimmed or sheared edges to have uniformity. Even mill rolled edges would qualify the product as strip. The vertical rolls are not necessary for edge rolling of flat product. Edge rolling can be and is achieved by the party by possessing the section of the product through edging passes while rolling.
Similarly flat is a finished product generally of rectangular cross-section with width 3mm and above having rolled edges only (square or slightly round). Whereas the Bar is a product which do not conform the specifications, inter alia of Hoops, strips/sheets and the Bar has nothing in common with that of flat.
The definition of strips covers a flat product of thickness upto 10mm and it will cover the flat product of thickness below 3mm and width over 75mm (not covered by the definition of Hoop) and therefore, the party's product of thickness less than 3mm and width over 75mm is rightly classifiable as strip.
As per above discussion, the products in question are appropriately classifiable as Hoop, Strip or Flat instead of Bar. Accordingly, the following products in question are classified as such :-
(a) Flat product with thickness less than 3mm and width below 75mm under Tariff Heading 7211.10 as Hoops.
(b) Flat product with thicknessless than 3mm and width 75mm and over as strip under Heading 7211.39 as Strips.
(c) Flat product with thickness 3mm and over but less than 5mm as flat under Heading 7209.10 as flats."
The Collector (Appeals) while upholding the Order of the Assistant Collector has reasoned as under :-
"I have carefully gone through the impugned orders and examined the appellants various pleas contained in the appeal petitions and put forth before me at the time of personal hearing. At the outset, I observe that CEGAT decision referred to by the appellants' is 'inpersonam and not in rent'. Therefore, the arguments that all these cases should be decided in the light of the CEGAT order is not tenable and these cases have to be considered on the basis of relevant facts and circumstances and merits. Further as regards the reference to the judgment of Bombay High Court reported in 1988 (33) ELT 684 (Bom.) upholding the decision of the AC, Aurangabad which was in favour of the appellant's arguments, I observe that this judgment mainly decided the applicability of Section 35 (3) (b) and Section 35(4) of Central Excises & Salt Act, 1944, regarding time limit and the judgment was clearly 'inpersonam', in specific consideration of the facts and circumstances of that case discussed therein; I find that there is nothing in that judgment which can be applied to these cases. Examining the merits of these cases, I observe that the pattis/pattas are definitely milled edges and are supplied in uncoiled or straight length forms of 6 to 7 feet and therefore the appellants' argument that the mills are not equipped to manufacture product as held in the impugned orders do not hold good; I also observe that mill is named after the products it rolls, for instance, bars and structural mills where bars and structures, are rolled is named so. Similarly a strip is a mill where strips are rolled and since pattis/pattas is a strip, the appellants' were rolling the same in a 'strip mill'. I also find that the tariff description does not lay down any specification of bars and flats in regard to width and thickness etc. and therefore, the classification of these products has to be based on the consideration as to how these are known commercially and in trade parlance. In regard to this, I also observe that in commercial and market parlance, the products of thickness of less than 3mm and width of less than 125mm are known as flats. Further as per glossary of terms relating to iron and steel products from the Indian Standard 1956-62, a bar has been defined as rolled or forged products of variable length, usually square, rectangular, hexagon or circular in cross-section whereas a flat has been defined as hot or cold rolled product generally of rectangular cross-section with edges of controlled contour, its width being greater than its thickness. Thus the criteria for classification of a product as flat is that its width should be more than the thickness, and the products in question confirm to this requirement and are recognised in trade and commercial circles as flats and not as bars."
The Appellants' claim that their products having thickness less than 3mm and width below 75mm; thickness less than 3mm and width above 75mm but below 200mm and thickness 3mm and above but below 5mm are Bars. Their plea is that their products of Section/Bar Mill do not have controlled contour, rectangular cross-section or rolled/slitted sheared edges. That the definitions and Tariff ruling by way of executive instructions classified them as Bars under erstwhile Tariff Item 26AA (ia) and Tribunal's decisions were in their favour as holding their products as Bar, and these definitions which have been incorporated in the subsequent Tariff Items as statutory definitions, will not take.their products out of the categories already held to be classifiable. One important criteria in these definitions is the "cross-section" apart from width and thickness which are found to be over-lapping. The Hoops, Strips, Flats have rectangular cross-section while the Bar may be rectangular, square, round etc. etc. The product of the appellant does not have rectangular cross-section nor controlled contour, or rolled/slitted or sheared edges. According to the Assistant Collector even a slightly rounded edge is a Flat, although not sharp edges as claimed by the appellants to be Flat and this element of slightly rounded edges allow the product to be termed as Flat product having rectangular cross-section. The Collector (Appeals) while discussing this issue has taken note of the fact that the Flat should have rectangular cross-section with edges Controlled Contour, but, however, has relied on one specification that width should be more than thickness and it is a Flat, but not on the issue that it must have rectangular cross-section with edges Controlled Contours, has not been dealt with. The Appellants have drawn our attention to the order of the Asstt. Collector, Aurangabad, in the case oiM/s. Mahendra Re-Rolls Industries, where an identical product not having rectangular cross-section of thickness less than 3mm and width 75mm rolled in a mill which can neither control the Contours, width and thickness is classifiable under Tariff Item 26AA(ia) and upheld by the Bombay High Court, reported in 1988 (33) ELT 684 and similar decision held by the Tribunal, reported in 1987 (30) ELT 527, Steel Corporation. of Punjab and Ors. v. CCE, Chandigarh which has been upheld by the Supreme Court reported in 1989 (39) ELT 175 (SC). These decisions relate to the period prior to 01-08-1983 when definitions were not in force, yet as seen from the abstract supra, these definitions before and after 01-08-1983 have not changed till 01-03-1988. All the products which do not conform to the definitions of either Hoop, Strip, Flat, come under the residuary Item Bar, as per the statutory definitions with effect from 01-08-1983.
Likewise, for the period covering 28-02-1986 to 29-02-1988 under Chapter 72, these definitions were incorporated in the Chapter notes with no change in the wordings and was a verbatim reproduction of the definitions under T.I. 25 of the earlier Tariff in vogue between 01-08-1983 to 27-02-1986. The same ratio as applicable to the products under T.I. 25 will apply to the products under Chapter 72.
During the course of the submissions, the Appellants produced copies of the various decisions of the Tribunal on Iron and Steel products in dispute prior to 01-08-1983 when Item 26AA was in force.
(i) 1987 (30) ELT 527 (Tribunal) - Steel Corporation of Punjab and Ors. v. CCE, Chandigarh, Order No. 226 to 249/87-B1 dated 15-04-1987.
The steel product less than 3mm thickness and width of 75mm or over has been held as classifiable under Item 26AA(ia) as Bar.
(ii) 1987 (30) ELT 558 (Tribunal) - Calcutta Steel Industries v. CCE, Chandigarh, Order No. 267 to 283/87-B1 dated 22-04-1987.
Product less than 3mm thickness and width over 75mm - Iron and Steel products - Hoop - held to be classifiable under Item 26AA(ia).
This is the Department's appeal against the Tribunal's Order in SI. No. 2 above. The Supreme Court has upheld the view that "rectangular products flat product" of thickness less than 3mm and width less than 75mm classifiable as Bars under T.I. 26AA(ia) and not as Hoops under Item 26AA (ii) of the Central Excise Tariff, nature of Mill not a criteria to decide the nature of the product.
(iv) Order No. 130/86-B1 dated 07-03-1986 - Rama Steel Rolling Mills, Mandi Gobindgarh v. CCE, Chandigarh.
Product less than 3mm thickness and width less than 125 mm held to be classified as Bars under T.I. 26AA(ia).
(v) Order No. 738/86-B1 dated 18-11-1986 - Deshmesh Steel Rolling Mills, Mandi Gobindgarh v. CCE, Chandigarh.
Product do not exceed 5mm thickness held to be classifiable as Bars under Tariff Item 26AA(ia).
(vi) Order No. 431/86-B1 dated 21-07-1986 - Kaushal Steel Rolling Mills v. CCE Chandigarh.
Products of thickness below 3mm produced in a Bar Mill and not Strip mill is classifiable as Bar under T.I. 26AA (ia).
(vii) Order No. 112 to 119/89-B1 dated 31-08-1989, CCE, Jaipur v. Sancheti Steels (P) Ltd. and Ors. - held classifiable under Item 26AA(ia) and not a Strip.
It may be noted that these decisions relate to the Tariff Item 26AA prior to 01-08-1983, but it is the contention of the Appellant that a product of the same dimension and description which was held as a Bar, when the Tribunal had gone by the available material like: clarification and Tariff Advices issued by the Central Board of Excise & Customs, on the definitions of the products, the nature of the Mill in which produced, and the books on the Iron and Steel products and these definitions had not undergone any change, why then the product should not continue to be the same product even after statutory definitions were incorporated in the Tariff, with no counter-evidence put forth by the Department, it has to be held that these decisions are maintainable and their ratios applicable. The Department has not contested these issues on the facts and have produced no concrete evidences to counter the arguments of the Appellants. Therefore, on the basis of the analysis made, the Appeals are allowed.
(B) THE SECOND SET OF APPEALS RELATE TO THE PERIOD AFTER 01-03-1988:
With the restructured Chapter Heading. 72, these relate to 56 Appeals, the Appellants' contention has already been retraced in Para-4 of this order. The Collector (Appeals) has made the following observations :-
"In all these cases, the appellants are manufacturing 'hot-rolled flat products' of iron and steel, of varying thickness and of width which have been classified by the Assistant Collector with effect from 01-03-1988/01-03-1989, as shown against Column '3' as against the appellant's claim indicated against Column '4' shown below :-
-----------------------------------------------------------------------------------
SI. No. Description of the Classified by Appellants' claim for Classifica-
goods Asstt. Collr. tion.
Under sub-
Heading No. as
-----------------------------------------------------------------------------------
(1) (2) (3) (4)
------------------------------------------------------------------------------------
1. Flat products of Flat rolled Under S.H. 7214.90 as 'other thickness less than products under bars and rods' of non-alloy 3mm and width less S.H. 7211.30 as steel.
than 75mm. 'Hoops'.
2. Flat products of Flat rolled -do-
thickness less than products under
3mm width above S.H. 7211.59
as 75mm. 'Strips'.
3. Flat products of Flat rolled -do-
thickness 3mm width products under
less than 400mm. S.H.7211.19 as
'Flats'.
4. Flat products of Flat rolled - do -
thickness above 5mm products under
width less than S.H.7211.11 as
600mm. 'Flats'.
5. Flat products of other Flat rolled Under S.H. 7228.30 as
alloy steel of width products under 'Other bars and rods' of
less than 600mm not S.H. 7226.91 as other alloy steel.
further worked than 'Flats'.
hot-rolled and thick-
ness less than 5mm.
6. Flat products of other Flat rolled -do-
alloy steel of width products under
less than 600mm not S.H. 7226.91 as
further worked than 'Flats'.
hot rolled and thick-
ness above 5mm.
------------------------------------------------------------------------------------
Thus all the products have been classified by the Assistant Collector as 'flat rolled products' as against the appellants' claim for classification as 'other bars and rods'. The Assistant Collector has not accepted the plea of the appellants that the goods in question being produced in their mill, commonly known as Bar Mill, should be classified as "Bars". He has also rejected the assessee's plea that the goods in question are having uneven thickness and hence are not of rectangular cross-section and has observed that the products manufactured by them are having solid rectangular cross-section. He has also rejected the plea of the appellants to the effect that since the revised tariff effective from 1-3-1988 does not incorporate the definitions of products like flats, hoops, strips, the definitions of such products which were prevailing prior to 1-3-1988 should be taken into consideration for the purpose of classification. He has observed that as old definitions stand substituted by the new definitions given in the Chapter Note of Chapter 72 effective from 1-3-1988, for the purpose of classification of their products, these definitions are to be considered and as per Chapter Note 1(k) of Chapter 72 the term 'Flat rolled products' has been defined, the classification of the goods is to be done in accordance with this definition provided in the tariff. The Assistant Collr. has further observed that since flat products manufactured by the appellants having thickness less than 4.75mm have also width measuring at least ten times the thickness or if of a thickness of and above 4.75mm have width exceeding 150mm, these fall in the category of 'falt-rolled products' as defined in Chapter Note 1(k) and hence are classified accordingly."
She has contended that the Tariff with effect from 01-03-1988 defines 'Flat Rolled Products' under Chapter Note 1(k) of Chapter 72 and such Flat-rolled Products are to be classified under the respective heading depending on the width, thickness, and she does not find any force in the Appellants' plea for classification as 'Other Bars and Rods', as defined under Chapter Note 1(m) of Chapter 72, when they conform to the definition under Note 1(k).
In considering the submissions, it is seen that Chapter 72 has been recast. Flat rolled products are defined in Note 1(k), Bars and Rods, hot-rolled irregularly wound coils are defined in 1(1) and other Bars and Rods under 1(m). Tariff Heading 72.08 to 72.12 relate to flat rolled products of different categories, and the sub-headings under each category is further categorised as per the dimensions as Plates, Sheets, Strips, and Hoops. It is pertinent to note that the definitions contained in the Tariff entries prior to 01-03-1988 have not been incorporated except Plates and Hoops in a Notification No. 170/88 dated 13-05-1988. The question to be decided is whether the products are to be regarded as Hoops, Strips or Flats as claimed by the Department of other Bars and Rods as claimed by the Appellants. It will be helpful to refer to the HSN Chapter 72, to see how these products are distinguished. Explaining the production of finished products, it is stated that semi-finished products and in certain cases ingots are subsequently converted into finished products. These are generally sub-divided into flat products (wide flats, including "universal plates, wide coils", Sheets, Plates and Strips) and long products (Bars, Rods, Hot-rolled in irregularly wound coils, other bars and rods, angles, shapes, section and wije). Flat rolled products defined in Note 1(k) and the Central Excise Tariff is a verbatim reproduction. These, definitions have already been taken note of in Para-4. The criteria among other specifications is that the cross-section is to be rectangular, the bars have cross-section of circles, ovals also rectangular, etc., the other Bars and rods are residuary items. It is the contention of the Appellants that their products are re-rolled in Section/Bar Mills and such mills can neither produce a product of rectangular cross-section nor do they have any arrangement for re-rolling, slitting or trimming edges. Their product has uneven thickness and uneven width, when definitions given in Chapter Note 1(k) under Chapter 72 for Flat rolled products are not found applicable to their products, the other appropriate heading would be the residuary heading as 'Other bars and rods." The Chapter 72 as it stands revised has brought all the Flat rolled products under a broad category. Therefore, it cannot be stated that there has been a departure in the categorisation of various products calling for a revision. There seems to be no reason as why the definitions of Strip, Hoop etc. should not be adopted from the earlier tariff which are also based on standard specifications. Presently the choice has to be made between the flat-rolled products and other item viz. Bars and Rods when the appellants' product does not have rectangular cross-section and has uneven thickness and width, the residuary entry is preferred, especially when in the earlier decisions of the Tribunal their product has been held to be a Bar. Therefore, on both these sets of Appeals covering the period from 01-08-1983 to 29-02-1988 and the period from 01-03-1988, the appeals filed by the Appellants (assessee) are allowed.
11. The next set of Appeals have been filed by the Revenue. Their contentions have already been set forth in Para-7 supra. The Collector (Appeals) has held that the product having thickness less than 3mm and width between 75mm to 200mm is not classifiable under Heading 7211.39 as Strips, as for classification as Strips, it should be in the form of "Coil or flattened coil", which is not the case under reference, and hence has allowed the appeals of the assessee. The Revenue's stand is that in the definition of Strips, the "Flattened Coil" have been clarified in bracket as "straight length", and therefore, Strips can be in coils as well as in straight lengths, and their classification under subheading 7211.39 has to be upheld. This issue already stands decided where the same definition of "Strips" under the Tariff Item 25, was clarified in the Order of the Tribunal No. 216 to 256/89-B1 - Collector of Central Excise, Jaipur v. Sancheti Synthetics (P) Ltd. and Ors., relevant portion of the order is reproduced below :-
"A simple reading of Sub-item 8 uf Tariff Item 25 will show that where the pieces are roughly shaped by rolling of iron and steel, not elsewhere specified. Definition of strip (XIV) and Tariff Item 25 is as follows :-
'Strip' means hot or cold-rolled products, rolled approximately in rectangular cross-section of thickness usually 10 millimeters and below with mill, rolled, trimmed or sheared edges and supplied in coil or flattened coil (straight length) form but excludes hoop and skelp.
By the above definition among other dimensions, the strip should be supplied in coil flattened coil (straight length) form, but in the case of appellant strip is not flattened coil nor is it supplied in coil form. Therefore the contention of the Revenue that the 'Patta-Patti' is a strip under Item 25(12) will not be correct and even if it is argued that strip need not be in coil or in flattened coil (straight length), yet the tariff description and definition has to be strictly applied. Therefore the classification under Item 25(8) is found to be appropriate. In the case of Saurashtra Chemicals, Porbandar v. Collector of Customs, Bombay reported in 1986 (23) ELT 283, the Tribunal had taken the view that Section Notes and Chapter Notes in the Customs Tariff Act are a part of the statutory tariff and thus relevant in the matter of classification of goods under the Customs Tariff. The relevant headings in the tariff have to be interpreted and applied in the light of Section Notes and Chapter Notes which are statutory and binding like the headings themselves. These Section Notes and Chapter Notes sometimes expand and sometimes restrict the scope of certain headings. In other words the scheme of the Customs Tariff Act is to determine the coverage, of the respective headings in the light of the Section Notes and Chapter Notes. In this sense, the Section Notes and Chapter Notes have an over-riding force on the respective headings. The goods in question do not specify the definition of 'Strip'. The judgments cited by the learned CDR do not help him. We uphold the findings of the Collector (Appeals). We do not find any merit in Revenue's appeals. The same are dismissed."
Applying the above ratio, we do not find any merit in the appeals filed by the Revenue and are, therefore, rejected.
12. In conclusion, the 164 Appeals are disposed of accordingly.