1987(07)LCX0042

BEFORE THE CEGAT, SPECIAL BENCH ‘Bl’, NEW DELHI

S/Shri H.R. Syiem, Member (T) and M. Santhanam, Member (J)

MITTER SAIN INDUSTRIES

Versus

COLLECTOR OF C. EX.

Order No. 468/87-B, dated 24-7-1987 in Appeal No. E/272/86-B1

Advocated By: Shri V. Lakshmi Kumaran, Advocate, for the Appellants.

Smt. V. Zutshi, S.D.R. for the Respondent.

[Order per : H.R. Syiem, Member (T)]. - The order under attack is C. No. V. (15) 33B off/Adj/1/86 dated nil passed by the Additional Collector of Central Excise, Meerut.

2. Mr. Lakshmikumaran, the learned Counsel for the producers, M/s. Mitter Sain Industries, .said that the Additional Collector came to the conclusion that their goods flattened aluminium wires rods produced by re-drawing through dies have turned into strips and must pay duty as strips. The goods are of dimensions 10.6 mm x 4.2 mm and 6.1 mm x 3.8 mm and were cleared during October, 1985. The goods so cleared weighted 6746.800 kgs. and were valued at Rs. 188,910.40 on which duty amounted to Rs. 52,284.32.

3. According to the learned Counsel, the wire rods which they buy from other people have their diameters first reduced and then in another operation, they are flattened. The result is flattened aluminium wire rods : they are not strips. He emphasised that they have no strip mill nor flat mill nor bar mill; their plant is only a re-drawing plant. The cross-section of the wire was the subject of considerable arguments by the learned Counsel. He said that unlike a strip, their flattened wires do not have a rectangular cross-section. The cross-sections of their goods are not rectangular, because the sides are slightly convex. Strips always have rectangular cross-section and their opposite sides are always parallel. Such parallel slues are not possible with their re-drawing machinery.

4. The learned Counsel for the department read from the Indian Standard the definition of sheets and strips. She referred to the argument that the goods are not cold rolled but said that if the definition of strips fits the product, it would not matter even if they were not cold rolled. Strips, argued the learned SDR, are not always in coils, but they are flat. The nature of the edges and the fact that they are not sheared would all depend on technological necessity, etc.

5. The learned Additional Collector quotes explanation (vii) “under former Tariff Item No. 27" as clearly defining an aluminium strip thus : ”a flat product, of a rectangular section, supplied in coil or flat form of thickness exceeding 0.15 millimetres but below 6 millimetres with length more than eight times the width." Former Central Excise Tariff Item 27 never had this explanation. The explanation is taken from the Central Excise heading 76 of the Central Excise Tariff Act, 1985, which came into operation in 1986. Since the Additional Collector applies the definition, and the definition is as good as any, we will see if the goods fit this definition.

5A. The Additional Collector records that the respondent contended that the product was not of rectangular section, because it did not have four right angles “being of rounded-off corner” (sic). This plea he wrote, was not substantiated by the defence and no evidence was adduced to establish that the product was “of rounded-off corner” and did not have rectangular cross-section. The adjudicator forgets that it was he i.e. the department, which should have examined the goods to see if they had rounded-off comer. He should have gone into the details of manufacture, the machines used in the manufacture, the contours of the goods, etc. to determine the cross-section. This is very necessary in metal products, because quite often the cross-section determines the category of goods. He rejects this argument, because no evidence had been adduced to establish that the product had rounded corner; but the evidence was before him all the time in the shape of the goods which he should have examined or should have caused to be examined to ascertain if they were rectangular in cross-section. After all, he relies on a definition that the strip was a flat product of a rectangular section. When the assessee questions the classification on the ground that the goods did not answer the description, it was not proper for the adjudicating authority to say that no evidence had been produced to prove the party’s case, when the evidence was only in the form of the goods which he was assessing.

6. The Additional Collector acknowledges that the goods were manufactured by flattening aluminium wires. He says : “I find that the said order related to the goods manufactured by flattensing aluminium wire which was sold by the buyers after insulation of as aluminium wires and cables.” There is thus substance in the claim of the manufacturers that their goods were flattened wire rods.

7. The Additional Collector does not seem to have taken into account the fact that there are such things as flattened wires and flattened wire rods. Flattened wire rods are made from round wire rods which are rolled, extruded, drawn etc. to flatten them. Here is the definition under Chapter 76 for Wrought Bars and Rods (including wire rods):

any extruded, rolled, drawn or forged products of solid section, of which the width or the maximum cross-sectional dimension exceeds 6 millimetres and which if they are flat, have a thickness exceeding one-tenth of the width.

8. It is the same chapter drawn upon by the Additional Collector for the definition of strips. The thickness of these wires all exceed one-tenth of the width and, therefore, they are flattened wire rods.

9. It is not lawful to classify them as strips, as they are not strips. The Additional Collector’s order is set aside.

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Equivalent 1989 (44) ELT 182 (Tribunal)