1985 (5) TMI 54 - SC - Central Excise

Supreme Court classifies Properzi Rods as 'wire rods' under Central Excises and Salt Act.

INDIAN ALUMINIUM CABLES LTD. Versus UNION OF INDIA

INDIAN ALUMINIUM CABLES LTD. Versus UNION OF INDIA - 1985 (21) E.L.T. 3 (SC) , [1987] 64 STC 180 (SC), 1985 (3) SCC 284 Issues Involved:1. Classification of Properzi Rods under the Central Excises and Salt Act, 1944.2. Determination of whether Properzi Rods fall under Entry No. 27(a)(ii) or the residuary Entry 68.3. Commercial and technical distinctions between Properzi Rods and wire rods.Issue-wise Detailed Analysis:1. Classification of Properzi Rods under the Central Excises and Salt Act, 1944:The primary issue in these appeals was whether Properzi Rods manufactured by the appellant fall within Entry No. 27(a)(ii) of the First Schedule to the Central Excises and Salt Act, 1944. The Government of India argued that Properzi Rods should be classified under this entry, while the appellant contended that they fall under the residuary Entry 68.2. Determination of whether Properzi Rods fall under Entry No. 27(a)(ii) or the residuary Entry 68:Entry No. 27(a)(ii) reads: 'Aluminium - (a)(ii) wire bars, wire rods and castings, not otherwise specified.' The appellant was directed by the Superintendent of Central Excise to clear Properzi Rods under this entry. The appellant's appeals and revisions were dismissed by various authorities, leading to the current Supreme Court appeals. The appellant argued that Properzi Rods should be classified under the residuary Entry 68, presenting several points to support this claim, including commercial distinctions and manufacturing processes.3. Commercial and technical distinctions between Properzi Rods and wire rods:The appellant presented several arguments to differentiate Properzi Rods from wire rods:1. Commercial Recognition: Properzi Rods are not known as wire rods in the trade.2. Usage: Properzi Rods are used for aluminium conductors and cables, while wire rods are used for nuts, bolts, and rivets.3. Length and Form: Properzi Rods are available in continuous coils, unlike wire rods which are shorter.4. Manufacturing Capacity: Manufacturers of wire rods cannot produce Properzi Rods.5. Specifications: Different specifications by the Indian Standards Institution and Cost Accounting Record rules.The Supreme Court examined expert opinions and affidavits from academics and industry professionals. The affidavits highlighted the differences in manufacturing processes and commercial recognition. However, the Court found that these differences did not preclude Properzi Rods from being classified as wire rods. The Court noted that the appellant itself obtained a licence to manufacture 'aluminium wire rods' and described the goods as such in official documents.The Court also considered the Aluminium Control Order and Circulars from the Cable and Conductors Manufacturers Association, which referred to Properzi Rods as 'Wire Rods.' The Court concluded that the process of manufacture and end-use could not solely determine classification under a fiscal schedule. The broad description of the article as 'wire rods' fit within the expression used in the Tariff.Conclusion:The Supreme Court affirmed that Properzi Rods fall under Entry No. 27(a)(ii) as 'wire rods.' The Court dismissed the appeals, confirming the judgment of the High Court and the order passed by the Government of India. The process of manufacture and end-use were not determinative; instead, the broad description of the article in the Tariff Schedule was crucial. The appeals were dismissed with costs.