2006(03)LCX0130

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, SOUTH ZONAL BENCH AT BANGALORE

Dr. S.L. Peeran, Member (Judicial) and T.K. Jayaraman, Member (Technical)

Technosales Corporation, Bangalore

Versus

Commissioner of Customs, Bangalore

Final Order No. 597/2006 decided on 15.03.2006 Appeal No. C/376/2003

Cases Quoted -

Dhiren Chemicals Industries 2001(12)LCX0010 Eq 2002 (139) ELT 0003 (SC) (referred)

Jindal Vijayanagar Steels Ltd. v. CC, Mangalore Final Order No. 54 and 55/2006 (mentioned)

Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive) 2004(09)LCX0236 Eq 2004 (172) ELT 0145 (SC) (mentioned)

Shri Vallabh Glass Works Ltd. and Anr. v. UOI 1984(03)LCX0010 Eq 1984 (016) ELT 0171 (SC) (mentioned)

Advocated By -

Rukmani Menon, Adv. for the Appellant
K.S. Bhat, Authorised Representative (SDR) for the Respondent

ORDER

T.K. Jayaraman, Member (Technical)

1. This appeal has been filed against the order in appeal No. 386/2003 dated 6th November, 2003 passed by the Commissioner of Customs (Appeals), Bangalore.

The appellants had imported Acoustic False Ceiling Panels. It was assessed duty under Chapter 6806.10 of Customs Tariff and 6807.90 of Central Excise Tariff, on payment of duty of Rs. 9,30,023. Later the appellants filed a refund claim for ah amount of Rs. 1,69,875.67 on the ground that the goods are rightly classifiable under 6807.10 of the Central Excise Tariff and attract 8 per cent CVD instead of 16 per cent CVD which they paid. In other words, the appellants challenged the classification. The original authority rejected the refund claim. The Commissioner (Appeals) also upheld the order of the Original authority. Then the appellants approached the tribunal.


2. The matter was remanded to the adjudicating authority to examine the issue afresh on supplying a copy of the test report, if any, and to pass an order accordingly. Consequently, the original authority passed an order dated 30th March, 2003. In the said order, the original authority held that the items are rightly classifiable under Chapter 6807.90 of the CETA, 1685 and rejected the refund claim. The above order has been upheld by the Commissioner (Appeals) who passed the impugned order. The appellant has strongly challenged the findings of the lower authorities.

Smt. Rukmani Menon, the learned Advocate appeared for the appellants and Shri K.S. Bhat, the learned SDR appeared for the Revenue.


3. The learned Advocate urged the following points:

(i) It is the contention of the appellants that the board imported by them contained more than 60 per cent by weight of slag wool fibre. In these circumstances, the impugned goods would be rightly covered under heading 6807.10.

(ii) The lower authorities have completely ignored the data sheets produced before them.

(iii) The Commissioner (Appeals) has observed that from a reading of description given under heading 6807.10, it is apparent that the exemption thereunder, was not available to any slag but was confined to slag generated by steel plant using the blast furnace route. That no evidence has been produced to show that the imported goods containe4 slag produced by steel plant using the blast furnace route and there fore, in the absence of this the appropriate heading would be 6807.90 for CVD classification. This was never the issue under consideration. Even otherwise, it is incorrect on the part of the Commissioner of Customs (Appeals) to say that no evidence has been produced. The appellants had produced letter dated 4th January. 2000 from the supplier wherein it had been stated that the imported item was made up of slag based mineral wool and the said slag was made of waste from the steel mills and when the slag was melted and poured on the spinning wheel or a drum and cooled, it attained the form of fibre or wool.

(iv) The appellants had further submitted that particulars obtained from the US patent and trade mark office wherein details were given about method of recycling natural waste. It has been clarified therein that the slag wool comprised of a composition of h on, copper and lead slags, typically removed from blast furnace.

(v) The learned Advocate also relied on the definition of slag wool, rock wool, etc. given in leading technical dictionaries.

Reliance was placed on the decision of this bench in the case of Rockwool India [final order No. 531, 534/2005 dated 24th March, 2005] relating to classification of Rockwool. As per the above decision, the items which contained more than 25 per cent by weight of slag wool are classifiable for CVD purpose under Chapter 6807.10. The said decision is binding on the Commissioner (Appeals) who has totally ignored the same.

(vi) The Commissioner of Customs (Appeals) has stated that the heading 6807.10 of the Central Excise Tariff was specifically designed to encourage use of waste products both as an environment friendly measure in addition to improving the viability of integrated steel plant using blast furnace route in India. This conclusion is irrelevant and does not have any bearing on the issue of classification under consideration.

The learned SDR reiterated the findings in the order in appeal.


4. We have gone through the records of the case carefully. The appellants claimed the classification of the item under 6807.10 of the Central Excise Tariff Act which reads as follows:

From the above description, it is clear that if the product contained more than 25 per cent by weight of blast furnace slag, it can be classified under the above heading and the duty would be nil. The appellants have furnished the manufacturing process of the impugned goods as under:

Recycled waste paper is sent through a shredder, then soaked in water and beaten into pulp form. A thick slurry of pulp, along with binders like starch/clay is then mixed with fibrous blast furnace slag which acts as the reinforcing agent.

The slurry is then poured into porous pans and left to stand an 80 per cent of the moisture drains off. The pan then is passed through an over so that the remaining moisture is driven out.

The resulting slab is then sent through automated cutters to cut the slabs into panels of size 600 mm × 600 mm or 1200 mm × 600 mm as specified in the client order specs. The edges are then finished and the panels passed through a painting booth to coat the surface with high light reflectance paints.

The finished product is then stacked in open warehouses for a period of 14 days for acclimatization then packed in corrugated cartons. This process of manufacture give rise to completely new product, now known as "Acoustic False Ceiling Panels Frost plus".

From the above, it is seen that the blast furnace slag is a constituent of the impugned product and it has been clearly indicated that the percentage of slag wool fibre is more than 60 in the impugned product. As regards the definition of slag wool, it is seen that it is a fibrous material made by blowing steam through melted slag. From the above information, it is clear that the impugned product contains blast furnace slag more than 25 per cent by weight. Hence, the contention of the appellants regarding the classification under 6807.10 is acceptable.


5. The learned SDR stated that in view of the Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive) [2004(09)LCX0236 Eq 2004 (172) ELT 0145 (SC)], the refund claim cannot be entertained when the assessment order has not been challenged.
6. In this context, the learned Advocate pointed out that this Bench in the Final Order No. 54 and 55/2006 dated 12th January, 2006 in the case of Jindal Vijayanagar Steels Ltd. v. CC, Mangalore relying on Apex Court decision in the case of Shri Vallabh Glass Works Ltd. and Anr. v. UOI [1984(03)LCX0010 Eq 1984 (016) ELT 0171 (SC)] has held that filing a refund claim itself is a challenge of the assessment order. Further in the above case, the Apex Court observation in the case of Dhiren Chemicals Industries [2001(12)LCX0010 Eq 2002 (139) ELT 0003 (SC)] that CBEC's instructions are binding even if the Supreme Court places a different interpretation as the Customs Manual outlines the procedure for filing the refund claim and the appellants had followed the same (customs manual of instructions, Chapter 15 at Para 1). In view of the above position, we allow the appeal with consequential relief.

Pronounced in the court on 15th March, 2006.

Equivalent 2006 (108) ECC 0294

Equivalent 2006 (134) ECR 0294 (Tri.-Bangalore)

Equivalent 2006 (200) ELT 0296 (Tri. - Bang.)

Equivalent 2006 (076) RLT 0363 (CESTAT-Ban.)