2010 (4) TMI 488 - AT - Central Excise

Tribunal affirms product classification under 7306.90, upholding Supreme Court ruling. Appellants ordered partial deposit, duty waiver pending appeal.

The Tribunal upheld the Department's classification of the product under chapter heading 7306.90, in line with the Supreme Court's ruling. The previous ... Stay - The dispute relates to the classification of the product manufactured by the appellants. The appellants are the manufacturers of taper steel tubes for telephone poles. According to the appellants the product is classifiable under chapter 7308.90 whereas according to the Department it is under chapter heading 7306.90. held that - pipes and tubes, merely because used as poles for supporting telephone wires do not themselves get transformed as structures. No case for total waiver of demand of duty. Issues Involved:1. Classification of the product manufactured by the appellants.2. Validity of the previous Tribunal decision in the appellant's own case.3. Applicability of the Board's Circulars.4. Requirement for deposit of the demanded duty.Detailed Analysis:1. Classification of the Product Manufactured by the Appellants:The core issue in this case revolves around the classification of taper steel tubes manufactured by the appellants for telephone poles. The appellants argue that the product should be classified under chapter heading 7308.90, which pertains to structures and parts of structures made of iron or steel. Conversely, the Department insists on classifying the product under chapter heading 7306.90, which covers other tubes, pipes, and hollow profiles of iron or steel. The authorities below have endorsed the Department's classification.2. Validity of the Previous Tribunal Decision in the Appellant's Own Case:The appellants contend that the classification issue was resolved in their favor by a Tribunal decision dated 8-5-2006, which classified the product under 7308.90. This decision was allegedly accepted by the Department, as confirmed by a letter from the Deputy Commissioner dated 23-3-2010. However, the Tribunal in the current judgment noted that the previous decision did not reference the Supreme Court's ruling in the Quality Steel Products Pvt. Ltd. case, which classified similar products under 7306.90. The Tribunal emphasized that the letter from the Deputy Commissioner lacks authoritative weight, as it does not reflect a policy decision sanctioned by the Board.3. Applicability of the Board's Circulars:The Tribunal examined two conflicting Board Circulars:- Circular No. 28/90 dated 20-7-1990, which recommended classifying steel tubular poles under 7308.90.- Circular No. 545/41/2000-CX, dated 6-9-2000, which, following the Supreme Court's decision in the Quality Steel Products Pvt. Ltd. case, directed classification under 7306.90.The Tribunal sided with the latter circular, noting that it was issued after the Supreme Court's ruling, which is binding. The Tribunal highlighted that the product's classification should be consistent with the Supreme Court's interpretation, which does not consider taper steel tubes for telephone poles as structures.4. Requirement for Deposit of the Demanded Duty:Given the conflicting views and the Supreme Court's authoritative decision, the Tribunal did not find a prima facie case for a total waiver of the duty demand. However, acknowledging the historical divergence in views, the Tribunal directed the appellants to deposit Rs. 30 lakhs out of the total duty demanded within eight weeks. The remainder of the demand, along with interest, was waived until the appeal's disposal. Compliance was scheduled for 21-6-2010.Conclusion:The Tribunal's judgment primarily upheld the Department's classification of the product under chapter heading 7306.90, aligning with the Supreme Court's ruling in the Quality Steel Products Pvt. Ltd. case. The previous Tribunal decision favoring the appellants was deemed non-authoritative due to its failure to consider the Supreme Court's ruling. The Tribunal also directed a partial deposit of the duty demanded, reflecting the historical ambiguity in classification.