1987 (3) TMI 221 - AT - Central Excise

Aluminium vial seals not pilfer-proof caps under Tariff Item 42 CET. Collector lacked jurisdiction. Appeal allowed.

KWALITY CONTAINERS (P) LTD. Versus COLLECTOR OF CENTRAL EXCISE, BOMBAY

KWALITY CONTAINERS (P) LTD. Versus COLLECTOR OF CENTRAL EXCISE, BOMBAY - 1987 (29) E.L.T. 304 (Tribunal) Issues Involved:1. Classification of aluminium vial seals under the Central Excise Tariff.2. Jurisdiction of the Collector to reclassify the product.3. Validity of the demand for payment of duty.4. Legitimacy of the confiscation order.Issue-wise Detailed Analysis:1. Classification of Aluminium Vial Seals:The primary issue was whether the aluminium tear-off and tear-down vial seals manufactured by the appellants should be classified as 'pilfer proof caps' under Tariff Item (TI) 42 CET or under TI 68 CET. The appellants argued that these seals are not caps but merely seals, and thus cannot be classified as pilfer proof caps. They contended that the seals are not known as pilfer proof caps in the trade and that their primary function is not to prevent pilferage but to hold the rubber plug in position, prevent spillage, and contamination. The Tribunal referred to the definition of pilfer proof caps in the Glossary of terms relating to metal containers trade published by the Indian Standard Institution (IS:1394-1973), which defines pilfer proof caps as 'screw-on closures with integral pilfer proof arrangements.' The Tribunal concluded that since the seals are destroyed upon opening and cannot be reused, they do not fit the definition of caps, much less pilfer proof caps.2. Jurisdiction of the Collector to Reclassify the Product:The appellants argued that the Collector had no jurisdiction to reclassify the product under TI 42 CET since the Assistant Collector had already classified it under TI 68 CET. The Tribunal agreed, stating that in the absence of new material, the Collector could not differ from the earlier conclusion of the Assistant Collector except by way of review under Section 35-A of the Central Excises and Salt Act. The Tribunal found that no new material had been presented to the Collector that was not available to the Assistant Collector.3. Validity of the Demand for Payment of Duty:The appellants contended that the Collector had no jurisdiction under Section 11-A to demand payment of duty. The Tribunal noted that Section 11-A conferred jurisdiction on the Assistant Collector to determine the amount of duty, and it was only after 20-12-1985 that the Collector could exercise this power. The Tribunal rejected the argument that a superior officer could perform the duties of a subordinate in the absence of a specific provision in the Act. Consequently, the Tribunal held that the Collector had no power to demand duty in this case.4. Legitimacy of the Confiscation Order:The appellants argued that the order for confiscation of the seized goods was improper. The Tribunal agreed, noting that the manufacture and clearances were in accordance with the earlier order of the Assistant Collector, which classified the goods under TI 68 CET and exempted them from duty. Since there was no case of willful infraction of any statutory provision, the Tribunal held that the order for confiscation was not justified.Conclusion:The Tribunal concluded that the tear-off and tear-down vial seals manufactured by the appellants are not pilfer proof caps and should not be classified under TI 42 CET. The Collector had no jurisdiction to reclassify the product or to demand payment of duty, and the order for confiscation was improper. The appeal was allowed, and the order of the Collector was set aside with consequential relief.Separate Judgments:- The Vice President agreed with the conclusion that the seals are not pilfer proof caps and stated that it was unnecessary to consider other contentions.- Another member concurred with the Vice President.Final Order:The appeal was allowed, and the order of the Collector was set aside with consequential relief.