Commercially distinct steel strappings treated as manufactured goods and classified under the residuary steel articles heading.

Processed cold rolled steel strips were held to become manufactured goods because slitting, deburring, welding, heat treatment, painting and waxing produced a commercially distinct article with a different name, character, use and market identity. Trade and commercial understanding was treated as the proper guide for tariff classification, and the goods were classified as tensile steel strappings under Chapter sub-heading 7308.90 rather than as cold rolled strips. On the material available, the majority found the record sufficient for final determination and declined remand. The product was therefore held excisable, and the departmental appeal succeeded on merits.

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Issues: Whether the processed steel strappings were goods classifiable under Chapter sub-heading 7308.90 of the Central Excise Tariff Act, 1985 and exigible to duty, and whether the appeal required remand or final determination on the available material.

Analysis: The majority held that the raw cold rolled steel strips underwent several processes, including slitting, deburring, welding, heat treatment, painting and waxing, and emerged as a commercially different product having distinct qualities, uses and market identity. The trade and commercial understanding of the product was treated as the proper guide for classification, and the material on record showed that the goods were marketed and used as tensile steel strappings for packaging and other specialised purposes. On that basis, the processes were held to amount to manufacture and the product was held to fall under the residuary steel articles heading rather than continue as cold rolled strips. The dissenting view favoured remand, but the majority concluded that the record was sufficient for final disposal.

Conclusion: The goods were held to be excisable and classifiable under Chapter sub-heading 7308.90, and the Revenue's appeal was accepted.

Final Conclusion: The impugned order was set aside and the departmental appeal succeeded on merits, with the final classification and duty liability decided in favour of the Revenue.

Ratio Decidendi: Where processing brings into existence a commercially distinct product with a different name, character and use, the product may be treated as manufactured goods and classified according to its trade identity under the appropriate tariff heading.

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