1990 (1) TMI 70 - SC - Central Excise

Goods held classifiable under tariff item 28AA(iv) as pipe fittings, not separate pipes; excise assessments modified

BHARAT FORGE & PRESS INDUSTRIES (P) LTD. Versus COLLECTOR OF C. EX.

SC held that the goods in question are classifiable under tariff item 28AA(iv) (pipe fittings) and not as separate pipe/tube items; entries in the ... Classification of pipe fittings under Central Excise Tariff - Item 26AA(iv) or tariff item 68 - payment of excise duty from indigenous producers from the open market and they also get steel tubes by way of import. - appellants say that the pipes and tubes retain their materials and original character and use and they can also be had only from dealers dealing in pipes and tubes - HELD THAT:- A certain amount of reliance has been placed on entries in the Harmonised Code as well as in the Customs Cooperative Council Nomenclature (CCCN). We do not, think that these entries and specifications are very helpful. The CCCN contains a number of entries in Section XV, namely, heading nos. 73.17 to 73.20. While heading nos. 73.17 to 73.19 talk of pipes, tubes and conduits, heading no. 73.20 speaks of 'tube and pipe fittings (for example, joints, elbows, unions and flanges), of iron and steel'. Section XVI also deals with some types of pipes and tubes. The position is similar under the Harmonised Code. In Section XV, there is an equally meticulous sub-division. Headings nos. 73.02 to 06 deal with various types of pipes and tubes. Then comes heading no. 73.07 which specifically talks, of 'tube or pipe fittings (for example, couplings, elbows, sleeves) of iron and steel (including stainless steel)' and proceeds to set out various sub-divisions of these items one of which is (7307.23 & 7307.93) 'butt welding fittings' which is the item of manufacture in the present case. It is true that 'tubes and pipes' and 'pipe fittings' fall under different sub-items under the above Codes where the two expressions are used in contrast and the sub-classification is more detailed. That dichotomy cannot be imported into the present context where there is only one comprehensive and generic entry. We cannot, therefore, derive any assistance from those entries. Thus, we are of the opinion that the view taken by the Tribunal is not correct and that the assessee's contention that the goods in question fall under item 28AA (iv) should be accepted. We, therefore, set aside the order of the Tribunal and direct the modification of the assessments accordingly. Issues:Classification of pipe fittings under Central Excise Tariff - Item 26AA(iv) or tariff item 68.Analysis:The judgment revolves around the classification of pipe fittings manufactured by the appellants under the Central Excise Tariff. The appellants argued that their products, created by cutting and shaping steel pipes and tubes, should be classified under Item 26AA(iv) as pipes and tubes, rather than under the residuary entry tariff item 68. They contended that no new product emerged from their processes, and the items retained their original character and use. However, the Central Customs Excise and Gold Appellate Tribunal disagreed, leading to the current appeal.The Supreme Court analyzed the issue by examining the language of the tariff entries. It emphasized that unless the goods in question cannot be classified under any specific tariff entry, they should not be categorized under the residuary entry. The Court noted that Item 26AA(iv) encompassed various types of pipes and tubes, irrespective of the manufacturing process. It highlighted that to fulfill the intended purposes of pipes and tubes, smaller pieces with different shapes are necessary, such as bends and elbows, which are essentially accessories to the larger pipes and tubes. The Court concluded that these smaller articles could also be considered as pipes and tubes, as they maintained their basic physical properties and end use.The judgment drew a parallel with a previous case regarding the classification of Properzi Rods as wire rods. The Court emphasized that the commercial name or identification of the product does not alter its classification under the tariff. Similarly, in the present case, although the items were known as pipe fittings in the market, they were deemed to be a species of pipes and tubes. The Court highlighted that the broad description of the article in the tariff should guide its classification, rather than commercial names or distinctions.Furthermore, the Court dismissed the reliance on entries in the Harmonised Code and Customs Cooperative Council Nomenclature (CCCN), stating that the detailed sub-classifications in those codes did not align with the comprehensive and generic entry in the Central Excise Tariff. The Court concluded that the Tribunal's classification was incorrect and directed the reclassification of the goods under Item 26AA(iv) of the Central Excise Tariff. As a result, the Tribunal's order was set aside, and the assessments were to be modified accordingly, with no costs awarded in the case.