2003(04)LCX0072

IN THE CEGAT, NORTHERN BENCH, NEW DELHI

S/Shri V.K. Agrawal, Member (T) and P.S. Bajaj, Member (J)

COMMR. OF C. EX., GHAZIABAD

Versus

NORTH STREET COOLING TOWER (P) LTD.

Final Order Nos. 322-325/2003-NB(B), dated 25-4-2003 in Appeal Nos. E/212-215/2003-B

REPRESENTED BY :   Shri V. Valte, SDR, for the Appellant.

Shri K. Kumar, Advocate, for the Respondent.

[Order per : V.K. Agrawal, Member (T)]. - These are the four appeals filed by the Revenue against the Order-in-Appeal Nos. 332-335-C.E./MRT/2002, dated 24-10-2002 by which the Commissioner (Appeals) has classified the product manufactured by M/s. North Street Cooling Tower (Pvt.) Limited under Heading No. 44.03 of the Schedule to the Central Excise Tariff.

2. Shri V. Valte, learned SDR, submitted that the Respondents manufacture Drive Shaft and parts thereof and Cooling Tower parts; that they had cleared wooden pieces of different sizes and length as Cooling Tower spares components under Heading No. 44.03 of the Tariff with nil rate of duty; that the wooden pieces were not just the raw wooden pieces but these were chemically treated wooden pieces, the fact which has been confirmed by Shri Sanjeev Kumar Tyagi, Authorised Signatory of the Respondents in his statement dated 16-5-2001; that as per Note 2 to Chapter 44 of the Tariff, the expression “densified wood” means the wood which has been subjected to chemical or physical treatment and will be classifiable under Heading No. 44.09; that the facts and circumstances of the case and use of impugned goods as parts of Cooling Tower do not appear to leave any doubt about the purpose of treatment of wooden pieces which was not limited only to make it termite or fungus proof but to provide strength also; that accordingly the correct classification of the product is under Heading No. 44.09. He finally submitted that the Chemical Examiner in his report has only mentioned that “the wooden sample does not appear to be densified”; that the said observation does not bring any finality in the matter and it cannot be relied upon with regard to the densification of the sample; that, however, the Chemical Examiner has clearly held that the sample was chemically treated and by applying the Note 2 to Chapter 44, the product is classifiable as densified wood.

3. On the other hand, Shri K. Kumar, learned Advocate for the Respondents, submitted that the Chemical Examiner has clearly stated that “the wooden sample does not appear to be densified”; that the wood was chemically treated only with a view to prevent the same from termite and fungus by dipping it into copper chrome arsenic composition; that dipping of wooden pieces into copper chrome arsenic composition does not transform them into a new article particularly as densified goods; that as per Note 2, densified wood means goods which are chemically or physically treated and which has thereby acquired increased density or hardness together with improved mechanical strength or resistance to chemical or electrical agencies. The learned Advocate mentioned that as per Indian Standard No. IS-401-1982 “The preservative shall conform to IS-10013 (Part-II) - 1981. The preservative is specially recommended in heavy termite and marine bores infected areas and in Cooling Tower Timbers, when soft rot is the chief deteriorating factor.”

4. We have considered the submissions of both the sides. Note 2 to Chapter 44 reads as under :-

“In this Chapter, the expression ‘densified wood’ means wood which has been subjected to chemical or physical treatment (being, in the case of layers bonded together, treatment in excess of that needed to ensure a good bond), and which has thereby acquired increased density or hardness together with improved mechanical strength or resistance to chemical or electrical agencies.”

5. A perusal of the Note clearly reveals that for being classified as densified wood under Heading No. 44.09, the wood has to be subjected to chemical or physical treatment which has thereby acquired increased density or hardness together with improved mechanical strength or resistance to chemical or electrical agencies. The Revenue has not brought on record any material to show that by chemical treatment undertaken by the Respondents the wood has acquired such characteristics as mentioned in Note 2. The Chemical Examiner to whom the sample was sent by the Department has clearly given his opinion that “It does not appear to be densified.” The Explanatory Note to HSN which also contains similar Note 2 as in the Central Excise Tariff provides that the densified wood covered by Heading No. 44.13 (similar to Heading No. 44.09 of Central Excise Tariff) has been chemically or physically treated to increase its density or hardness and improve its mechanical strength or resistance to chemical or electrical agencies “Two main processes, impregnation and densification, are used to produce the products of this heading. These processes may be used separately or together. In impregnation the wood is deeply impregnated, usually with thermosetting plastics or with molten metal..” Densification has effect of contracting the cell of the woods which may be done by transverse compression by means of powerful hydraulic press or between rollers, or by compression in all directions at high temperature in an autoclave. We observe that the Commissioner (Appeals) has given his finding that the wooden pieces in the present matters have simply been dipped into the copper chrome arsenic composition in order to make them anti-termite and anti-fungal and this process cannot be understood to subjecting the same to chemical or physical treatment which thereby acquire increased density or hardness together with improved mechanical strength or resistance to chemical or electrical agencies. We, therefore, find no reason to interfere with the impugned Order by which the impugned product has been classified under Heading No. 44.03 of the Tariff. All the appeals filed by the Revenue are rejected.

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Equivalent 2003 (155) ELT 610 (Tri. - Del.)